Does IRS Fresh Start Apply in California? What You Need to Know
Does IRS Fresh Start Apply in California? What You Need to Know
If you owe back taxes to the IRS and live in California, you’ve probably heard about the Fresh Start Initiative.
But what is it, exactly?
The IRS Fresh Start program isn’t a single form — it’s a collection of taxpayer-friendly relief options that can help you resolve tax debt without fear of garnishment or ruin.
This blog breaks down:
- What the Fresh Start Initiative includes
- Who qualifies (and who doesn’t)
- How to apply from California
- How it overlaps with Offer in Compromise, payment plans, and penalty relief
What Is the IRS Fresh Start Program?
Launched in 2011 and still active today, Fresh Start expanded access to:
- Streamlined Installment Agreements
- Offer in Compromise (OIC)
- Penalty Abatement
- Avoiding federal tax liens under certain thresholds
These programs are available nationwide, including California.
Key Fresh Start Options
| Option | What It Does | Who Qualifies |
|---|---|---|
| Streamlined Installment Agreement | Allows up to 72–84 months to pay | Owe under $50,000, in compliance |
| Offer in Compromise | Settle for less than you owe | Can’t afford to pay full debt |
| First-Time Penalty Abatement | Removes failure-to-file or pay penalties once | Clean filing history in prior 3 years |
| Lien Avoidance Threshold | Prevents automatic lien filings | Tax debt under $10,000 |
Do California Taxpayers Qualify?
Yes — but you must meet the federal requirements:
- Filed all required tax returns
- Not in an open bankruptcy
- Current with estimated payments and withholding
- Able to demonstrate financial need (for OIC or hardship relief)
Fresh Start does not apply to:
- FTB debts
- CDTFA assessments
- EDD payroll taxes
Those require separate resolution strategies under California law.
Fresh Start and Offer in Compromise
Fresh Start significantly expanded eligibility for IRS OIC by:
- Increasing the allowable
expenses in the budget formula
- Reducing the
future income multiplier from 4x to 1x (lump sum) or 2x (monthly)
This makes it easier for low-income or middle-class taxpayers to qualify — even in high-cost areas like Orange County.
Fresh Start and Installment Agreements
You can now qualify for streamlined IRS payment plans up to:
- $50,000 without submitting a financial statement (Form 433-A)
- $250,000 with expanded criteria, but full disclosure may still be required
These agreements are easier to set up and keep you protected from levies or garnishments.
CPA Tip: Fresh Start Is Just the Beginning
Even if you qualify for Fresh Start, the IRS won’t help you choose the best path.
That’s where we come in.
At Boulanger CPA, we:
- Review your
IRS transcripts
- Analyze your financial situation
- Recommend whether to file for OIC, hardship, or payment plan
- Submit forms and negotiate with the IRS on your behalf
📞 Call 657-218-5700 or Schedule a Consultation
Frequently Asked Questions
What is the IRS Fresh Start program?
Fresh Start is a set of IRS programs that help taxpayers settle, pay, or reduce back taxes without aggressive collection action.
Is Fresh Start available in California?
Yes. Fresh Start is a federal program and applies to all U.S. taxpayers, including those in California.
Can Fresh Start stop wage garnishments?
Yes. If you enter a valid payment plan or OIC under Fresh Start, the IRS will pause wage garnishment and levies.
Does Fresh Start apply to state tax debt?
No. Fresh Start only applies to federal tax debt with the IRS. State agencies like FTB and CDTFA have separate processes.
Do I need a CPA to apply for Fresh Start relief?
You’re not required to, but a CPA can ensure your forms are accurate, complete, and give you the best chance at approval.
📣 About the Author
Marc Boulanger, CPA is the founder of Boulanger CPA and Consulting PC, a boutique tax resolution firm based in Orange County, California and trusted by high-income individuals and business owners across Southern California.
He is the author of Defend What’s Yours: A California Taxpayer’s Guide to Beating the IRS and FTB at Their Own Game, available now on Amazon. The book offers a step-by-step plan for resolving IRS and FTB tax debt without losing your business, your home, or your peace of mind.
With over a decade of experience resolving high-stakes IRS and State tax matters, Marc brings strategic insight to complex cases involving wage garnishments, bank levies, unfiled returns, and six-figure tax debts. He is known for helping clients reduce or eliminate tax liabilities through expertly negotiated settlements and compliance plans.
Marc is a Certified Public Accountant licensed in California and Oklahoma and holds the designation of Certified Tax Representation Consultant. He is a member of the American Society of Tax Problem Solvers (ASTPS) — the national organization founded by the educators and practitioners who have trained thousands of CPAs, EAs, and tax attorneys in IRS representation strategy.
Every case is handled with discretion, proven methodology, and direct CPA-led representation — not call center scripts.
📍 Learn more at www.orangecounty.cpa or call (657) 218-5700.
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