Tax Help: Examples of Tax Debt Relief Options

Installment Agreement

For those who cannot pay their full tax debt at once but can pay their tax debt over an extended period of time, installment agreements can be an excellent option. Installment agreements are a monthly payment plan option in which you pay the IRS in monthly installments over a period of time, which is generally between 6 months to 10 years. The amount you may pay with each month with an installment agreement, as well as the time period you’ll have to pay your balance, will vary depending on your unique financial circumstances and your negotiations with the IRS (or your tax professional’s negotiations with the IRS).

There are a number of different types of installment agreements, including standard installment agreements, stair step installment agreements, streamlined installment agreements, partial pay installment agreements, and conditional expense installment agreements. Your tax professional can help you determine which type of installment agreement would be best for you.

Offer in Compromise

Those who are experiencing financial hardship may qualify for an offer in compromise (OIC), which can allow you to pay less than the full amount of tax you owe. Entry into the offer in compromise program can be challenging, as the IRS always wants to collect a taxpayer’s full tax debt whenever possible, so we generally advise seeking the services of a tax professional when seeking an OIC. However, if you are experiencing financial hardship and may qualify for an OIC, seeking one is highly beneficial, as this is one of the few IRS options that allows you to pay a tax settlement amount that is less than your full back tax amount.

Currently Non Collectible

For those experiencing extreme financial hardship, gaining currently not collectible status can be a valuable tax debt relief strategy. Currently not collectible is an IRS tax status that puts IRS actions against you on hold. While this status does not stop the accrual of penalties or fees, it can help protect you from a number of serious IRS actions, including wage garnishment, bank levies, and other IRS collection process actions.

Audit Representation

For those facing the threat of an IRS audit, audit representation services can help you defend yourself from an IRS investigation. During an audit representation, your assigned tax professional can help you protect your rights as a taxpayer by limiting the scope of your audit to only what is legally required, organize your tax records (including personal, business, or payroll tax records), ensure you do not pay more than you owe, present the IRS with tax relief solutions on your behalf, speak with Internal Revenue agents on your behalf, appeal or defend your audit, and more.

Innocent Spouse Relief

Those who unknowingly find themselves in IRS debt as the result of their spouse’s actions can sometimes qualify for innocent spouse relief. Through this tax relief strategy, if the IRS determines that you did not know about your partner’s actions that led to your tax debt, such as incorrect or fraudulent tax preparation, you may be granted relief from your joint tax debt.