Resolving IRS Debt: What are Your Options?

Last updated on August 7, 2021

If you are burdened with tax debt and are looking for ways to resolve it, you need to know the choices available to you. A taxpayer under IRS debt needs to choose an IRS debt payment program to pay their back taxes if they are unable to pay the entire tax debt amount in a single payment.

IRS Debt Payment Programs

If your financial condition is such that you are unable to pay the tax debt in a single payment, the IRS provides various IRS debt payment programs depending on the difference in the financial condition of taxpayers.

Installment Agreement: Those taxpayers who can pay the entire tax debt amount, but not in a single payment can use IRS’ Installment Agreement. Under this agreement, taxpayers are required to pay their tax debt in fixed monthly installments.

Offer in Compromise: Those taxpayers whose financial condition is so bad that they are struggling to meet basic needs for survival may apply for the debt reduction program of the IRS called Offer in Compromise.

Currently Not Collectible: Taxpayers who do not have enough funds to pay off their tax debt, but may see an improvement in financial condition may apply for Currently Not Collectible. The IRS gives this status to tax debt cases where the taxpayer is presently not in a condition to pay the IRS debt.

Partial Payment Installment Agreement: Taxpayers who cannot afford to pay the entire tax debt amount, but may pay a part of it can use this IRS agreement under which they need to pay the reduced tax debt amount in monthly payments.

It is best for taxpayers to hire a tax expert to negotiate the terms and conditions of the IRS debt payment program they are applying for. Most taxpayers rely on the expertise and experience of a tax professional or a tax resolution company to resolve their tax debt issue. For successful resolution of a tax debt problem, make sure you get a genuine tax help.