IRS Tax Debt Payment Plans for Debt Reduction

Last updated on July 26, 2022

IRS debt reduction plans are attractive to taxpayers, but their presence is there to help taxpayers whose financial condition does not allow them to pay in full, resolve their tax debt affordably. Each IRS reduction plan has strict qualifying restrictions taxpayers must meet.

The IRS assesses the financial condition of taxpayers including identifying any assets, retirement funds, and income from any source. If taxpayers have the capability of receiving a loan or paying the amount in monthly installments over a period of time, they may consider other payment plans, such as an Installment Agreement.

An Offer in Compromise or a Partial Payment Installment Agreement are IRS tax debt reduction plans that help taxpayers resolve their back taxes without having to pay the full amount. Under an Offer in Compromise, a significant reduction in tax debt can be achieved depending on the particulars of a tax debt case. A Partial Payment Installment Agreement allows for the partial payment of the total tax debt amount in payments. Taxpayers must apply for the resolution plan that they have best chances of qualifying for and one that provides the most benefits.

As most tax debt reduction cases are complex, most taxpayers hire a tax resolution service to apply for the most appropriate IRS program. A tax professional assists them with exploring their options, understanding and preparing their case, and representation and negotiation. Taxpayers should research before hiring a tax service to ensure the best resolution of their IRS debt problem.