Tax debt can be one of the most damaging types of debt to have hanging over your head. The IRS and state tax agencies can garnish your wages, place liens and levies on your financial accounts and physical property, and save your credit from tax penalties that can remain indefinitely until the debt is repaid.

Like most types of debt, there are a range of solutions available when you’re facing problems with one or multiple years of back taxes. Which solution you use really depends on your financial situation, including your income, budget and ability to repay what you owe.

Explore the solutions below to start identifying the right path out of debt in your situation. If you have questions or would like to consult with a tax debt professional for free, complete the form or call us to connect with the right expert for your needs.

Spectrum of Tax Debt Solutions

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Installment Agreements (IA)

In most cases even if you only owe one year of back taxes, you may not be able to pay back what you owe in a single lump sum. An installment agreement (IA) allows you to set up a repayment plan so you can pay off unpaid tax debt in a way that works for your budget. You can also consolidate multiple years of tax debt into a single IA to make repayment easy.

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Currently Not Collectible (CNC) Status

If you’re in a situation of financial hardship where paying the IRS or facing wage garnishment would cause a severe financial crisis, you can file for Currently Not Collectible (CNC). This will stop the IRS from any collection actions and give you time to recover before you start to repay your tax debt.

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Penalty Abatement

If you had reasonable cause for not filing or not paying tax debt on time, then you may qualify for penalty abatement. This may remove some or all of the monthly penalties applied to your debt, as well as interest applied to those penalties. This can help reduce the total amount you owe to the IRS, so you can focus on paying back your actual debt.

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Offer in Compromise (OIC)

If your challenges with tax debt are simply too big to pay back everything you owe, an Offer in Compromise (OIC) allows you to settle up with the IRS for less than the full amount you owe. It’s the IRS’ form of tax debt reduction and tax settlement. We can help you see if you can qualify for an OIC to end your tax challenges once and for all.

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Tax Debt Forgiveness

Carte-blanche forgiveness of tax debt is usually rare, but it’s not unheard of. There are specific situations, such as Innocent Spouse Relief, that may allow you to avoid personal obligation to repay a debt owed to the IRS. Learn how tax debt forgiveness works so you can set reasonable expectations as you move forward.

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* http://cleanslatetax.com/blog/irs-tax-liens-levies-continue-downward-trend-2013

† https://www.irs.gov/PUP/newsroom/FY%202013%20Enforcement%20and%20Service%20Results%20--%20WEB.pdf

This website is intended for informational purposes and as a reference tool to match consumers with companies that may be able to assist them. Additional Advertising Disclosures are here

DISCLAIMER: Debt.com does not provide tax relief services, but, upon request, acts as a locator service for BBB registered companies. Such tax specialists offer tax relief solutions for those worried about or experiencing tax liens, wage garnishments, bank levies, or other IRS tax-related collection measures. While Debt.com endeavors to connect individuals and families with appropriate tax relief professionals and resources, individual financial circumstances and tax situations will vary from person to person. It is ultimately up to you to determine whether the companies that we may introduce you to are appropriate for your situation.

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