Tax debt settlement refers to the process where taxpayers settle their tax debt with the IRS.

Here the taxpayers reach an agreement or settlement with the IRS to either pay in partial or full through one of its Tax Debt Settlement programs.

The most common option for IRS tax debt settlement would be through an Offer in Compromise. An Offer in Compromise allows taxpayers to settle their IRS tax debts for a fraction of what they owe based on the individual taxpayer’s current and future financial situation.

If a taxpayer does not qualify for an Offer in Compromise then another tax settlement option is to negotiate an Installment Agreement with the IRS. An Installment Agreement allows taxpayers that cannot afford to pay in full the option to settle their tax debts through manageable monthly payments.

The other option for IRS tax debt settlement is when the IRS places a taxpayer’s account on Currently Not Collectible (CNC) status when enough evidences prove that a taxpayer has no ability to pay by way of full payment, through an Installment Agreement or an Offer in Compromise. Unless such status is revoked, the IRS will stop all collection activities, including levies and garnishments.

The last option for a taxpayer hoping to settle their IRS tax debts is through filing for bankruptcy which is often seen as the last resort. If you are considering filing for bankruptcy, it’s best to speak with a bankruptcy attorney regarding whether your IRS tax debts can discharged in a bankruptcy.

IRS tax settlements require specialised skills and expertise. Whatever tax settlement options you are considering, it’s vital to seek professional advises of tax specialists or tax attorney when dealing with your tax problems.