Tax Debt Resolution Programs

Last updated on July 4, 2022

The IRS has many tax debt resolution programs to assist with the various financial circumstances of taxpayers. Some of the most commonly used back taxes resolution programs are the Installment Agreement, Offer in Compromise, Currently Not Collectible and Innocent Spouse. These programs allow taxpayers to resolve their back taxes with or without the full or partial payment of the debt amount depending on the case and the resolution program chosen.

All IRS payment plans have requirements that taxpayers will need to meet in order to qualify. The IRS also considers a taxpayer’s ability to pay the debt among other factors, when approving a debt payment plan. Only taxpayers who do not have the financial capability to pay their tax debt in a lump sum should consider applying for the InstallmentAgreement, Offer in Compromise or Currently Not Collectible programs.

Innocent Spouse Relief can be used by a spouse if there is tax debt due to an understatement of taxes, which the spouse did not know about. The innocent spouse can claim ignorance of the understatement to receive relief from the debt. If a spouse qualifies for Innocent Spouse Relief, the entire tax debt, including penalties and interest is shifted to the spouse found liable for the tax debt.