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Tax debt relief for IRS and State Tax Debts

Are you facing difficulty in paying back your taxes? Are the state tax authorities or IRS running behind you to pay back the debts? Don’t worry; there are a number of different solutions that can get you out of this troublesome situation.

Owing money to IRS or state is entirely different from owing money to the creditors or bank. The IRS or the state authorities’ posses more resources to collect the payment as compared to the creditors. They might seize your assets or may file tax lien against you when taxes go unpaid or the tax returns are missing. You might receive notices or letters from the authorities, ordering you to pay your taxes.


Will IRS accept the offer to compromise, if I fail to pay my delinquent taxes?
If you facing difficulty in paying your taxes in full due to economic hardships or other circumstances you may qualify for Offer to compromise. You will have to follow a certain procedure to apply for an offer in compromise. Also, you will have to fill out an application form along with application fee and initial payment to apply for the same.
Will I have to pay interest and penalties for paying my taxes late?
Yes, you will have to pay certain interest on the unpaid balance and also failure-to-file and failure-to-pay penalties, if you fail to pay your taxes on time.
Even while making installment payments, can I apply for an offer in compromise?
Yes! An IRS may even suspend your installment agreement while evaluating your Offer in Compromise.
What happens after my OIC is approved by the IRS?
Once your OIC is approved, you will have to make payments to the IRS of the amount offered. Payment has to be made up to 90 days or 2 years. When all your payments have been made, IRS may reduce your tax lien, thus eliminating your tax liability.

Why people have tax issues?

There are lot of reasons that cause people to face tax issues. A few of them are:

  • Failure to file returns

This is the most common cause that leads an individual to owing money to IRS or the state authorities. It’s mandatory to file a tax returns when your income surpass the minimum requirements.  IRS may file a Substitute for return, if you fail to file a return. Thus you may end up paying a huge amount of taxes including the penalties and interest payments as well.

The state may file an estimated state tax return on your behalf if you do not file a state tax return. If the state files for EST, it may put you in a higher income tax bracket, and you may have to pay a higher amount than you would have paid if you had properly filed the returns.

  • Inability to make estimated tax payments

Business owners fail to pay estimated tax payments. These results in accumulation of tax debt and the business owners may not have enough funds to pay the amount they owe.

  • Inaccurate tax return preparation

You might end up making a lot many mistakes, when filing for income tax return. You may fail to collect the necessary information or you may just rush to meet the deadline. Some mistakes might be made by certified public accountant who may not be well versed with the intricacies of the tax code. However, these  mistakes may prove to be quite costly for you.

tax relief


  • IRS or state tax authorities

The IRS or state tax authorities may conduct an audit of your tax returns. Based on the outcome, you may have to pay the additional taxes which may arise as a result of penalties or disallowed deductions.

  • Mistakes from tax company

It’s very complicated to understand the taxes codes and their applicability based on the unique situation. But at the same time, it’s very crucial to have a deep understanding of IRS and state tax authorities to get the best outcome. Such mistakes by clients or tax resolution firms are very difficult to resolve.

Tax relief options

There are many tax relief options available under the IRS tax code. Here’s a list of potential options that will help you to resolve your debt issues.

  • Offer in compromise

An offer in compromise is an agreement that allows the taxpayers to settle for an amount less than what they actually owe. The purpose of offer in compromise is to decide the terms that are of interest to both the parties, the taxpayers as well as the federal government. The aim of the program is to promote acceptance of payments and filing requirements.

  • Installment agreements

Tax payers, who owe a large amount, may find difficulty in paying a lump sum to settle their debts.  So they have an option of installment agreements. An installment agreement, gives an opportunity to tax payers to pay smaller, manageable amount towards their debts. Taxes are paid through a payment plan. IRS will help you by establishing a time frame to pay off your taxes.  Our experts have an extensive experience in negotiating installment agreements and guiding the tax payers with all the procedure involved in getting an installment agreement.

  • Collection statute expiration date

The IRS may fix up an expiration date by which the debt must be collected. The government’s right to collect the liability ends during the expiration period.

  • Currently non collectable

Businesses or individuals who are unable to pay their taxes due to extreme economic or personal difficulties may find a relief from IRS by halting collections. Penalties or interest charges may continue to accrue but the IRS may not take a serious action such as bank levies, wage levies, asset seizure while the account is in CNC.

  • Penalty abatements

An alternative method to offer in compromise is penalty abatements. This option allows you to reduce the amount you owe. You can abate interest on interest only when interest is on abated penalties. Penalties can only be abated when debt is paid or through installments. You need a professional written document in order to increase your chances of obtaining abatement of penalties.  Also, taxpayers must show reasonable care in resolving debt.

  • Tax lien subordination

Tax lien subordination utilizes an asset to get money to pay off the tax owed.

  • Other debt relief options

We have certain other additional tax solutions for resolving your tax issues. We will recommend the best solution based on your circumstances.