Need advice on Offer in Compromise for friend facing IRS tax debt - Fresh Start Program legit?

The "Fresh Start Program" is a real initiative the IRS introduced years ago, but it's not a specific program where tax debt just disappears. It's a collection of different tax relief options including Offer in Compromise (OiC), installment agreements, and penalty abatement. For your friend's situation, here's what you should know: Yes, she may qualify for an Offer in Compromise, which allows taxpayers to settle tax debt for less than the full amount owed. However, the IRS thoroughly evaluates financial situations - they look at income, expenses, asset equity, and ability to pay. It's definitely not guaranteed they'll accept any offer. Regarding first-time penalty abatement - absolutely! She should request this regardless of pursuing an OiC. First-time abatement can remove failure-to-file and failure-to-pay penalties for the first time you have penalties. As for bankruptcy and tax issues simultaneously - yes, this can be done, but timing matters. Some tax debts can be discharged in bankruptcy depending on their age and circumstances, but not all. Her bankruptcy attorney's guidance here is important. Regarding paying someone $4,500 - that's a steep fee. While tax resolution specialists exist, be cautious of anyone promising to make tax debt "completely disappear." Many taxpayers successfully negotiate OiCs themselves using IRS Form 656. That said, complex situations sometimes benefit from professional help.

Just wanted to share my experience. I was in a somewhat similar situation with about $35,000 in back taxes from self-employment. I kept getting nowhere with the IRS until I found https://taxr.ai which basically saved my sanity during this whole process. They analyzed my tax documents, identified all possible relief options, and gave me a personalized action plan. The biggest thing they showed me was that I actually qualified for multiple relief programs (not just OiC), and they helped identify exactly which expenses and hardships the IRS would consider legitimate in my case. They even created a custom report I could take to my tax meeting that outlined everything clearly. For your friend, it sounds like she might have multiple options - OiC is one, but there's also Currently Not Collectible status if she truly can't pay anything, or she might qualify for a partial payment installment agreement. The tool will show her everything she qualifies for based on her actual numbers.

I was actually in the skeptical camp about these tax relief services until I tried https://taxr.ai after seeing it mentioned here. I had about $12k in back taxes and was convinced I'd be paying the full amount plus penalties. The analysis showed me I qualified for a partial payment plan AND penalty abatement I didn't know about. The document they generated literally walked me through exactly what to say to the IRS, what forms to use, and how to document my situation properly. I ended up settling my $12k debt for about $5,500 and got all the penalties removed. The difference was having something that actually calculated my "reasonable collection potential" the same way the IRS does, so I knew exactly what offer they would accept. No more guesswork or getting rejected multiple times. For what it's worth, I originally planned to pay someone $3,000 to handle everything, so this saved me a ton of money while still getting me the relief I needed.

For anyone dealing with the IRS like your friend is, one of the biggest challenges is actually getting through to a human at the IRS who can help. I spent WEEKS trying to get answers about my OiC application last year - constant busy signals, disconnects after holding for hours, or getting someone who couldn't actually help with my case. I finally used a service called https://claimyr.com and it was a complete game-changer. They have this system that navigates the IRS phone trees for you and holds your place in line, then calls you when an actual IRS agent is on the line ready to talk. They also have this demo video that shows how it works: https://youtu.be/_kiP6q8DX5c This saved me literally days of hold time. For your friend's situation, being able to actually speak with the IRS directly about her OiC options could make a huge difference versus relying on whatever her fiancé's contact is telling them.

I was SUPER skeptical about Claimyr when I first heard about it (as you could see from my comment above). I thought it was some scam or just an auto-dialer that wouldn't actually work. But after spending THREE DAYS trying to get through to the IRS about my payment plan, I got desperate and tried it. I'm still shocked by how well it worked. I put in my number, went about my day, and about 2 hours later got a call connecting me directly to an IRS agent who could actually help with my case. Saved me hours of frustration and I was able to get clear answers about my situation instead of guessing. For anyone dealing with OiC or other IRS programs, being able to actually talk to someone makes a massive difference. You get real answers instead of trying to interpret the IRS website or getting filtered information from paid "tax relief" companies.

I wanted to add something about that $4,500 fee your friend's fiancé mentioned. I'm a former tax preparer (not giving official advice), but that fee is WAY too high for what's likely needed in this case. A typical OiC application might cost $1,500-2,500 from a reputable tax professional, including preparing the unfiled returns. I'm concerned that: 1. The fiancé might be getting kickbacks from whoever he's referring her to 2. The professional is overcharging by promising "guaranteed" results 3. They might file a boilerplate OiC that has little chance of acceptance Remember that ANYONE can request an installment agreement or apply for an OiC - these aren't secret programs. The value in professional help is proper preparation and documentation, not access to "secret" programs. Also, I'd be concerned about the fiancé who promised to file her taxes and didn't. That's a major breach of trust, especially since it's causing penalties and interest to accumulate.

Just want to add one thing about bankruptcy and taxes - timing is SUPER important here. For income taxes to be dischargeable in bankruptcy: 1. The taxes must be income taxes 2. The due date for filing the tax return was at least 3 years ago 3. The tax return was filed at least 2 years before filing for bankruptcy 4. The tax assessment was made at least 240 days before filing bankruptcy 5. There was no fraud or willful evasion Since her taxes for 2022 and 2023 haven't even been filed yet, they almost certainly won't be dischargeable in bankruptcy. This means she'll still owe them after bankruptcy unless she uses OiC or another resolution method.