5 Ways To Get Rid Of Your IRS Tax Debt

When you owe tax payments to the IRS, there may be alternative avenues to explore. Find out if one or more of these 5 methods could work to reduce your IRS debt:

5 Ways To Get Rid of IRS Debt - Tax Relief Options Explained by Tax Attorney

#1 Offer In Compromise

– You have to apply for this status from the IRS, see our Offer in Compromise guide here.

– This is for settling your tax debt for less than you owe based on your financial information. Basically it proves that you are unable to pay the full bill.

– If you are barely making it financially each month and don’t own too many assets, your odds are good that you could be approved for an Offer in Compromise.


#2 Penalty Abatement

– This is the process of removing the penalty portion of your tax debt. This can be a significant portion of your money owed.

– You want to do this once you have paid off the base tax amount or are close to it.

– See our guide on IRS penalty abatement to see if your qualify and to see what forms to fill out.


#3 Filing Over Substitute For Returns

– If you have not filed for a given year, the IRS might file for you.

– This means that sometimes the IRS has come up with debts for you based on tax returns you did not actually file.

– You’re almost always better off filing your own return! Filing your own tax returns over those the IRS fills out automatically may result in a zero balance or at least substantially reduce your tax obligation.

– See our guide to unfiled IRS tax returns.


#4 Currently Not Collectible Status

– Only consider if you already know that you do not qualify for an Offer In Compromise.

– If you have too many assets, or if your debt is close to expiring, filing for Currently Not Collectible status can be a way to get out of paying your IRS debt entirely. At the least, it might put it off.

– See our full guide to Currently Not Collectible status here. This is another route where you fill out a form to apply for this status.


#5 Audit Reconsideration

– If you were previously audited but did not agree to it, you might be able to get an audit reconsideration through.

– The IRS is just as capable of making a mistake as anyone else, so going over an audit trail to pinpoint an error might be a wise step.

– See our guide on understanding IRS letters and responses, which includes several steps pertaining to audits.


Need help from our expert tax attorneys? 

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About Pete

Crusader for consumer and taxpayer rights! Relentless researcher digging through the IRS red tape to inform the public.

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