Resolution of IRS Debt without Paying Full Amount

Last updated on October 17, 2022

Tax debt is a burden that must be dealt with at as quickly as possible because it only grows with time. Those taxpayers that do not have the financial capability to pay their entire tax debt can resolve their tax debt case using various IRS payment plans that do not require full payment. The two most popular IRS tax debt payment plans are Offer in Compromise and Partial Payment Installment Agreement.

These payment plans allow taxpayers to achieve a reduction in tax debt so that they are able to pay the balance and resolve their tax debt. The advantages of resolving tax debt are many, including avoidance of IRS collection actions, and less penalties and interest. An early resolution saves taxpayers the risk of federal tax lien or levy, which can be damaging to their finances. It also helps avoid accumulation of penalties and interest that substantially raise the total tax debt.

The IRS considers only those taxpayers that are in financial difficulty and cannot afford to pay the entire tax debt for tax debt reduction plans. If the IRS reviews their financial strength and finds that they can only pay a reduced amount, the IRS may qualify them for tax reduction.

In cases of tax debt reduction, most taxpayers use professional help because resolution requires negotiation with the IRS and deep knowledge of tax laws. For a smooth resolution of tax debt, taxpayers must carefully plan each step of the process and research before hiring a tax help professional.