Answer: For what it’s worth, take some comfort in knowing that you are not alone. There are millions of Americans in similar situations, dealing with debt hanging over their heads and concerned about how it will affect their future.
The good news: You have many options. To fully understand and take advantage of your options, we urge you to see a qualified tax resolution professional. He or she will take a close look at your previous returns, looking for mistakes that may have resulted in an inflated tax debt amount. This process alone can substantially lower your IRS debt.
Once you and your qualified tax professional have analyzed your previous returns, the next step is to negotiate a resolution with the IRS. You will most likely be looking at one of two options – the Offer in Compromise or the Installment Agreement.
The Offer in Compromise (OIC) was created for people who owe a substantial amount to the IRS but who, for whatever reason, are unable to pay their tax debt off, even over time.
The Offer in Compromise allows taxpayers to negotiate a settlement amount that will take care of the entire tax debt once and for all. This settlement agreement can lower the tax debt by a significant amount. If you do not qualify for the Offer in Compromise – and to do so you must be able to prove eligibility – then you may consider the Installment Agreement, which allows you to pay off your debt by making manageable monthly payments.
A properly structured Installment Agreement is usually the best option for taxpayers. An OIC is a great option, but it can be really tough to qualify.