When it comes to tax debt owed to the IRS, payment plans are often the best first solution.
Streamline Payment Plans may allow individuals with debts of under $250k avoid financial disclosure by agreeing on a monthly repayment plan over 72 months; whereas tiered payment plans give more flexibility depending upon your ability to pay, though full financial disclosures will need to be made.
Other options such as Offer in Compromise (settling for less than what is owed) and Currently Not Collectible (a two-year hold where the IRS suspends all collections when declaring an inability to pay) can also be explored.
Consulting an experienced WATAX accountant or attorney should always form part of a successful resolution strategy. If a payment plan turns out to be your best option, it should be accompanied by a Penalty Waiver: Reasonable Cause and/or First Time Abate.
