IRS is the Internal Revenue Service Company that is run by federal government and this company
collects tax from the country. If you have to pay money to IRS then do not worry because there are
some legit ways through which you can reduce that amount. These legit methods help you to pay less
than money than you owe in legal ways. The company knows that there are situations where you cannot
pay the amount that you owe them thus there are certain expectations in this case.
You can bargain with IRS yourself or you can hire someone on your behalf such as tax resolution
companies to go through the process on your behalf because these companies has experienced officials
that will help you pay less amount than you owe. The experienced officials are the attorneys and the
CPAs that the company hires to support you. You can also use more than one method to get the best
result in any case.
If you are thinking that how can IRS debt happen to you, then there might be certain events in your life
that can cause that. Sometimes there are certain times in life when you are hit by unexpected events
and you are not able to pay your tax thus it can cause debt. Whatever the reason is, there are methods
through which you can pay less debt than you owe. So starting from the 1 st method,
1- Partial Payment Installment Agreement
There is a new method introduced by IRS through which you can save money. This is a legit program in
which you pay the owed debt in installments. The IRS program named as Partial Payment Installment
Agreement allows you to pay your debt amount in installments for a specific period of time and after
that time has completed, you do not have to pay for the future. This means you just have to pay for the
time you have decided and after that even if you have not paid the full amount, the remaining amount
will be exempted. You are eligible for the program if your debt amount is 10 thousand dollars or more.
There are certain other requirements that you need to fulfill and if you cannot do it yourself you can
take help from a tax resolution company because this can fasten the process because you have an
experienced attorney on your side.
2- Offer in Compromise
This is a program offered by IRS itself to accommodate those people who cannot pay their debt in full.
This program lets you pay the debt amount less than you owe to IRS. In this Offer in Compromise
program you will make a deal with IRS and pay a lump sum payment of your debt. The lump sum
payment that you will have to pay will be less than the amount you have to actually pay. In this case you
will have to pay the amount all at once in order to qualify for this program. However in some cases you
can pay this amount even in installments. But if you want to pay in installments you will have to fulfil
certain requirements of IRS. For example, there should be a doubt that you can pay the full amount and
there are some circumstances due to which it is not possible for you to pay the full amount. If you have
an experienced attorney on your side, this could help you to easily qualify for the program.
3- Fresh Start Initiative Program
Another IRS program that can help you to settle your IRS debt for less is the Fresh Start Initiative
Program. The program is newly launched and is widely used by tax payers. If you want to use the offer in
compromise program and also want to pay your debt in installment then you can do the both with this
program because it has both the facilities. You have an increased threshold if you want to use the offer
in compromise via this program. The program also has a plan to remove liens quickly from your property
once you have paid your debt for full. The Fresh Start Initiative Program allows you to pay your debt
easily and quickly.
In order to qualify for the Fresh Start Initiative Program you need to meet some requirements and these
are that your income should be $100,000 annually and if you are single person. If you have a partner and
you want to file the tax return jointly then you should have a joint income less than $200,000 annually.
Other than that your tax dues should not exceed more than 50 thousand dollars at the end of the
financial year. If you are self-employed and want to apply for this program than you will have to prove
that your income was reduced by 25%. So if you meet these requirements then you should apply for this
4- Statute of Limitation Laws
One of the best and legal method to exempt your tax amount is to use Statute of Limitation Laws. If you
are eligible for this program you can simply get off from all the debt that you owe to IRS. Either you will
reduce your tax amount or you will exempt all the amount that you owe to IRS. According to the law of
Statute of Limitation, IRS has to collect all the tax that is on your name within 10 years of the day that it
was assessed. If IRS failed to collect this tax from you then you can apply for under this law and by this
you will be able to reduce your tax amount or totally eliminate it. If it has not been 10 years, you can
even then apply and there is a chance that you can take advantage from it. If you are paying your tax
payments on installments and you have applied for the program, you can halt the payments even then.
5- Innocent Spouse Tax Consolation
If your spouse or partner has not paid his or her tax and if he has provided wrong or misleading
information then you can get a relief by IRS by proving yourself as an innocent spouse. For this you
should have the history where you and your spouse were filing for tax jointly otherwise, you won’t be
eligible. If this is the case with you, you can apply for three different programs of different types.
The first program is the Innocent Spouse Relief program and you can get relief from this program if your
partner has not reported his or her income. You are also eligible if your spouse has not provided true
information about his or her income. The 2 nd program is the Separation of Liability Relief in which you
can only apply if you are legally separated from your partner. By this program, you only stay responsible
for the tax that you owe but not of your partner. This package is basically for those people who got
separated and now there tax files are still jointly reported. If there was any misinformation, you can get
yourself free by applying to this program. The 3 rd program that falls in to this category is the Equitable
Relief program in which you can apply if there is any misinformation reported by your spouse and it is
affecting the amount of money you owe to IRS. For this you should be able to prove that the
misinformation was from your partner side otherwise you would not be able to succeed.
There are many tricks and issues in these types of laws so I would always suggest consulting an tax
attorney first before applying for a program.
6- Apply For CNC Program
This is a short term alternative that can help you get on track if you are unable to pay your tax returns.
CNC status means a Currently Not Collectible status and if you are able to have this status on your IRS
file then you can stop collection companies to bothering you. In order to get this status, you will have to
prove to IRS that you are in financial hardships and you do not have enough money left to pay your debt
after your necessities. The necessities include the cost of living that you have to pay every month and
that are food, clothing, personal care and service, utility expenses, transportation charges etc. Some
other charges may include in the costs of living and when you will apply IRS will calculate your income
and expenses and will check whether you are eligible for this or not. As I said this is not a permanent
solution but you can save some money and you are able to stand back without any pressure from the
So these are some of the methods through which you can settle your IRS tax debt for less than you owe.
Every program has its own limitations and I strongly recommend consulting a tax attorney in order to
save the most money. Do comment in the section below and let us know if you have any queries
because we would love to hear from you. Best of luck!