Tax Settlement

written by Claudia Grant
reviewed by Drew O. Mark
June 12, 2023

So you find yourself having a tax problem. Fortunately, the IRS provides options for taxpayers to resolve their debt. There are many options to help reduce, and in some cases eliminate, tax arrears, ranging from filing or correcting a tax return to arrangements like penalty abatement, installment agreements, or offers in compromise.

Does the IRS really settle for less?

An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can’t pay your full tax liability or doing so creates a financial hardship. Consider your unique set of facts and circumstances: Ability to pay.

Innocent Spouse Relief

Relieves responsibility for paying tax, interest, and penalties if your spouse (or former spouse) improperly reported items or omitted items on your tax return.

Offer in Compromise (OIC)

Offer in Compromise program, under 26 U.S.C. § 7122 allows qualified individuals with an unpaid tax debt to negotiate a settled amount that is less than the total owed.

Tax Debt Forgiveness

The IRS tax debt relief or forgiveness program allows taxpayers who owe unpaid taxes to reduce part of their debt, according to their circumstances.

Currently Not Collectible

Being currently not collectible does not mean the debt goes away, it means the IRS has determined you cannot afford to pay the debt at this time.

Penalty & Interest Abatement

Taxpayers can request that the IRS “abate” the penalties. Abatement is simply removing the penalties after they are assessed to the taxpayer.

Negotiating with the IRS

Most taxpayers have find that working with a professional, can significantly impact the odds of reaching an acceptable settlement with the IRS.

Fresh Start Program

Help taxpayers who owe much more than they can reasonably afford to pay. This can significantly reduce their federal tax debt; they may be able to reduce 90%.

Claudia Grant

Claudia Grant is a seasoned financial expert with a rich and diverse background. Holding a Master of Science in Taxation, Claudia's 15 years as a CPA and ten years as a financial manager have shaped her into a true industry authority. Departing from the traditional office setting, Claudia now thrives as a tax and financial consultant, catering to a wide array of companies. Her passion for sharing knowledge shines through her insightful articles, where she breaks down complex financial concepts into simple pieces. Claudia's expertise and dedication make her an invaluable resource for businesses seeking adept financial guidance in an ever-evolving landscape.
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