If you’re facing unpaid taxes, know that you’re not alone—and there are ways to manage and reduce what you owe. With a bit of planning and some professional help, you can start taking steps to relieve this burden.
1. Look into offer in compromise (OIC)
An Offer in Compromise (OIC) allows some taxpayers to handle their taxes for less than they owe if paying in full would cause financial hardship.
- Eligibility requirements: the IRS considers factors like your income, expenses, and asset equity.
- Application process: the OIC process can be complex, and applications are not guaranteed to be approved. This is a very rare program to be approved for.
Many people choose to work with a tax resolution service for help in navigating this process.
2. Request penalty abatement
If you owe because of penalties on missed payments, you may qualify for penalty abatement, which means getting some fees removed. There are several types:
- First-time penalty abatement: available if this is your first time having tax trouble.
- Reasonable cause penalty abatement: if you missed a payment due to specific circumstances, like illness or a natural disaster.
Penalty abatement can reduce your tax balance and give you some breathing room, and a tax professional can help determine if you qualify.
3. Use currently not collectible (CNC) status
If you can’t pay due to financial hardship, you might qualify for Currently Not Collectible (CNC) status, which temporarily stops the IRS from trying to collect on your money.
- How it works: you must demonstrate that paying would make it impossible to cover basic living expenses.
- Temporary relief: this status doesn’t erase the tax balance but can provide temporary relief until you’re able to pay.
Applying for CNC status can be a good short-term solution, and working with a tax resolution service can make the application process smoother.
4. Consider expert assistance from a tax resolution service
Navigating tax options can be complicated. Tax resolution services specialize in helping people like you manage and potentially reduce your tax balance. These services can assist with:
- Handling offers in compromise applications
- Seeking penalty abatement
A tax resolution service can make this journey less overwhelming and ensure that you’re exploring every option available to you.
Tax issues can feel heavy, but with a plan and the right support, you can work toward relief. Whether it’s setting up a solution, requesting penalty relief, or getting help from a tax resolution service, you don’t have to handle it alone.
