But here’s the good news: The IRS has LEGAL programs to help you reduce, settle, or manage your debt. In this guide, we’ll walk you through 5 proven programs that can get you back on track—and potentially save you thousands.
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If you owe the IRS, ignoring it will only make things worse. Penalties and interest grow every day, and the IRS has the power to garnish your wages, seize bank accounts, or even take your home.
But here’s the good news: The IRS has LEGAL programs to help you reduce, settle, or manage your debt. In this guide, we’ll walk you through 5 proven programs that can get you back on track—and potentially save you thousands.
Let’s get Started
💡 Best for: Those who can’t afford to pay their full tax debt
💰 Potential savings: 50-90% reduction in tax debt
An Offer in Compromise (OIC) allows you to settle your tax debt for less than you owe—sometimes just pennies on the dollar. The IRS considers factors like income, expenses, and asset equity to determine if you qualify.
🔹 Example: You owe $50,000, but based on your financial situation, the IRS may accept a settlement of $7,500.
📝 Tip: Most applications are denied if not filed correctly. Professional help increases approval chances!
💡 Best for: Those facing financial hardship and can’t pay anything
🚨 Stops: Wage garnishments, bank levies, and IRS collection efforts
If you can’t afford to pay anything without severe financial hardship, the IRS may classify your account as “Currently Not Collectible” (CNC). This pauses collections and stops aggressive enforcement actions.
🔹 Example: You owe $20,000, but after proving financial hardship, the IRS halts collections indefinitely.
📝 Tip: The debt doesn’t disappear, but CNC status buys time until you’re in a better financial position.
🔹 Example: You owe $50,000, but based on your financial situation, the IRS may accept a settlement of $7,500.
📝 Tip: Most applications are denied if not filed correctly. Professional help increases approval chances!
💡 Best for: Those who can pay, but need a manageable payment plan
📅 Timeframe: 6-72 months
If you can’t pay in full but can afford small monthly payments, an Installment Agreement (IA) lets you pay your tax debt over time without IRS harassment.
🔹 Example: You owe $10,000, and instead of paying it all at once, you set up a $200/month plan over 5 years.
📝 Tip: Some agreements reduce penalties & interest!
💡 Best for: Those hit with large IRS penalties
📉 Savings: Potentially thousands of dollars
Did you know the IRS may remove penalties if you have a valid reason for falling behind? This is called Penalty Abatement and can eliminate or reduce extra fees.
🔹 Example: You owe $15,000, but $5,000 is just penalties and interest. With Penalty Abatement, you could cut your debt to $10,000.
📝 Tip: Valid reasons include medical emergencies, natural disasters, and financial hardships.
💡 Best for: Those whose spouse (or ex) caused the tax debt
👩⚖️ Protects: You from unfair IRS collection actions
If your spouse (or ex-spouse) misreported income or failed to pay taxes, you shouldn’t be held responsible. Innocent Spouse Relief can remove your liability from the tax debt.
🔹 Example: Your spouse owed $30,000 in taxes but didn’t tell you. You prove you were unaware, and the IRS removes your responsibility for the debt.
📝 Tip: You must act fast—there are strict time limits to qualify!
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📞 Prefer to talk now? Call us at (716) 631-5111 for a free consultation!
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At Lawler & Witkowski CPAs, every member of our tax team is fully federally licensed as either a Certified Public Accountant (CPA) or an Enrolled Agent (EA). This means we have the qualifications and authority to represent you before the IRS if necessary. Additionally, we are committed to staying at the forefront of the ever-changing tax landscape. Our team undergoes rigorous continuing education, ensuring we are always trained on the newest laws, regulations, and strategies. This dedication allows us to provide you with the most effective and compliant tax solutions available.
Do you have unfiled back tax returns, or are things a little messy? You’re not alone, and we’re here to help. At Lawler & Witkowski CPAs, we specialize in resolving tax issues, including helping individuals and businesses get back on track with the IRS and state tax authorities.
Unfiled tax returns can lead to serious consequences, including penalties, interest, and even enforcement actions such as wage garnishments or bank levies. The good news? It’s never too late to take control, and we have the expertise to guide you through the process. By working with our experienced team, you can:
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