Tax debt relief screener

Screening tool only. Tax debt relief eligibility depends on specific IRS calculations using your actual income, expenses, and asset values. This screener identifies likely pathways only. A tax attorney, CPA, or enrolled agent confirms your options and handles IRS negotiations. See our full disclaimer.

Your tax debt relief options

Get a free tax debt consultation

A tax attorney or enrolled agent negotiates with the IRS on your behalf, stops levies and liens, and identifies the relief program that reduces your balance the most. Free initial consultation in most cases.

What IRS tax debt relief programs exist?

The IRS offers 5 main resolution programs for taxpayers who can't pay in full. Each one has different eligibility requirements and outcomes.

An Offer in Compromise (OIC) settles your debt for less than the full amount owed. The IRS accepted over 40,000 OICs in 2023, with a 36% acceptance rate on submitted offers. It's the most powerful option but the hardest to qualify for.

An installment agreement lets you pay your balance over time - up to 72 months for most taxpayers, and up to 84 months in some cases. It doesn't reduce the balance, but it stops collection actions while you're in good standing. If your overall debt load goes beyond just taxes, the debt-to-income ratio calculator helps you see the full picture of what you owe relative to income.

Currently Not Collectible (CNC) status temporarily halts all IRS collection when you can prove your monthly allowable expenses equal or exceed your income. The debt remains but no collection happens while CNC is active - usually reviewed annually.

Penalty abatement removes penalties (not the underlying tax) for taxpayers with a history of compliance or a qualifying reasonable cause. First-time penalty abatement is available to taxpayers with a clean 3-year history. Innocent spouse relief protects a spouse from liability for their partner's tax underreporting.

Can tax debt be discharged in bankruptcy?

Some income tax debt can be discharged in Chapter 7 or Chapter 13 bankruptcy if specific timing rules are met: the return was due at least 3 years before filing, filed at least 2 years before filing, and the IRS assessed the tax at least 240 days before filing.

Payroll taxes, trust fund taxes, and taxes tied to fraudulent returns are never dischargeable. If older income taxes are part of your debt mix, bankruptcy may eliminate them entirely alongside other unsecured debt. Use the Chapter 7 means test calculator to check your income eligibility, and review the full discharge picture with the debt discharge estimator.

What stops the IRS from collecting while you pursue relief?

Filing an OIC application automatically suspends IRS collection for the duration of the review - plus 30 days after rejection if you don't appeal, or through the appeals process if you do.

An installment agreement in good standing also suspends most collection activity. CNC status stops collection while active. A Collection Due Process (CDP) hearing request, filed within 30 days of a final notice of intent to levy, suspends levy action until the appeal is resolved.

Filing for bankruptcy triggers the broadest protection: the automatic stay under 11 U.S.C. § 362 stops IRS levies, liens, and wage garnishment immediately - though the IRS can seek relief from stay for current-year taxes and taxes that don't meet discharge criteria.

What is the IRS collection statute and why does it matter?

The IRS generally has 10 years from the assessment date to collect a tax debt. This is called the Collection Statute Expiration Date (CSED). Once it expires, the debt is legally uncollectable - the IRS must stop all collection activity.

Some actions pause the CSED clock: filing for bankruptcy, requesting a CDP hearing, submitting an OIC, or living outside the U.S. for more than 6 months. Knowing your CSED date is critical to choosing the right strategy - sometimes waiting out the statute is more effective than paying.

A tax attorney calculates your exact CSED for each tax year and advises whether "waiting it out" is viable given your specific collection history and tolling events.

Frequently asked questions

An Offer in Compromise lets you settle your IRS debt for less than the full amount owed. The IRS accepts offers based on your "reasonable collection potential" - a formula using your assets and future income over the remaining collection period. You must have filed all required returns, made all required estimated tax payments for the current year, and not be in an open bankruptcy proceeding. The IRS accepted 36% of submitted offers in 2023. Most accepted offers settle for a small fraction of the total balance, particularly for taxpayers with low income and few assets.

CNC status is a temporary hardship designation the IRS grants when your monthly allowable living expenses - using IRS National and Local Standard expense tables - equal or exceed your monthly income. While in CNC status, the IRS suspends all levies, garnishments, and active collection. The debt and interest continue to accrue. The IRS reviews your status annually and may resume collection if your income improves. CNC is a useful short-term tool but not a long-term solution - it's often used as a bridge while pursuing an OIC or waiting for the CSED to expire.

First-time penalty abatement (FTA) removes failure-to-file, failure-to-pay, and failure-to-deposit penalties for taxpayers who have a clean compliance history for the prior 3 years - meaning no penalties assessed in those years. You don't need to demonstrate a specific reason for the failure; a clean history is sufficient. FTA can be requested by phone or in writing. It can eliminate substantial penalties, particularly for larger tax balances where penalties have compounded. It doesn't reduce the underlying tax or interest.

Yes to both, but with significant practical limitations. The IRS can levy a primary residence only with prior court approval and only after establishing that other assets are insufficient. This is rare. Retirement accounts (401k, IRA) are not protected from the IRS the way they are in bankruptcy - the IRS can levy them. However, the IRS must follow the same levy notice and CDP hearing procedures for retirement accounts as for other assets. An installment agreement or OIC application suspends levy action, protecting assets while you negotiate.

For simple installment agreements on balances under $10,000, you can often negotiate directly with the IRS. For anything involving an OIC, CNC, CDP appeals, trust fund penalties, or balances above $25,000, professional representation is strongly recommended. Tax attorneys, CPAs, and enrolled agents can represent you before the IRS, know which programs apply to your specific facts, and can often achieve better outcomes than self-representation. Many offer free consultations and flat-fee or contingency arrangements for OIC cases.