IRS Rules for Tax Debt Relief

Last updated on March 14, 2023

The IRS has many payment plans for the resolution of the tax debt, some of which do not involve its full payment. The resolution of a case with tax debt relief depends on the unique circumstances of the taxpayer. For example, a taxpayer that does not have enough income or assets to pay the full amount of tax debt can pay a reduced amount in installments to resolve the tax debt under a payment plan.

Because the IRS charges interest and penalties on tax debt until it is paid in full, taxpayers should make efforts to resolve their back taxes as early as possible. In some cases, the IRS may reduce or remove penalties. Taxpayers that wish to get a reduction in tax debt or penalties must consult or work with a professional tax service or a tax lawyer.

When resolving a tax case, it is vital to understand the IRS debt relief rules that apply to the case. Each payment plan for tax debt resolution has specific qualifying factors. Some of the IRS rules are flexible and can be negotiated to benefit the taxpayer. For negotiations, the services of a tax lawyer are essential.

In tax debt cases where the IRS sends notices regarding tax debt payment, but does not receive an appropriate response, they move to collection actions such as tax lien or tax levy to ensure payment of the tax debt.