ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

How to Settle IRS Tax Debt?

Updated on June 10, 2014

Got Tax Debt?


How to Settle IRS Tax Debt

Are you in trouble with the Internal Revenue Service (IRS)? I hope not. But, the truth of the matter is that every year, thousands of Americans find themselves in trouble with this agency. Luckily, being in trouble with the IRS is not as bad as it sounds, most of the time. Most of the time, people just have gotten behind in their payments, or have made honest mistakes. Settling with the IRS actually is not that difficult – at least, not nearly as difficult as it seems at times.

This article will teach you how to settle IRS tax debt. But, before we begin, just know that the best advice anyone can give you is to talk to licensed, qualified tax professional, preferably an attorney that has had experience dealing with the IRS regarding tax debt.

There's No Escape


How to Settle IRS Tax Debt: The First Steps

If you owe money to the IRS, they will definitely let you know about it. Very few people can make it through without the IRS ever finding out about delinquent taxes – especially this day and age, when taxes are almost completely computerized. So, if you owe taxes, you will receive notifications from the IRS.

They first will send you a standard notice, stating that you owe a certain amount. They will also give you a reason as to why you owe this money – and give you essentially three options. The first option is that you agree with the IRS and you will pay them in full. The second option is that you agree with them only in part, and will only pay the amount you think you owe. The third option is that you disagree with them fully and will appeal their decision.

With the last two options, you will have to state your case to the IRS. This is the first opportunity you have to settle your debt. If you can prove that you do not owe as much as they said, then you can reduce or eliminate your debt. But, if the IRS determines that you do, in fact, owe, then settling your debt moves to the next level.

They Want You


How to Settle IRS Tax Debt: The Offer in Compromise

Should you decide that you do, in fact, owe the money but cannot pay the full amount, you can request a payment plan. The IRS will usually agree, but beware: they will charge you interest on your total debt. This will mean you will pay more than you originally owed.

An alternative to this is to submit an offer in compromise. This is basically a deal, of sorts. You are offering to pay a reduced amount in taxes because you cannot afford to either pay the full amount up front or pay it out in installments. The philosophy behind this is that the IRS wants as much as it can get. If you can reasonably show that you cannot give them the full amount, they will take what they believe you can afford. (And contrary to popular belief, the IRS does not want to bankrupt you. Doing so means that they do not get paid!)

So, if you are in debt to the IRS, relax; there are ways to settle your tax debt without giving them the shirt off of your back.


    0 of 8192 characters used
    Post Comment

    • shai77 profile imageAUTHOR


      7 years ago

      Thanks RJ :-)

      Happy to see you here.

    • Reynold Jay profile image

      Reynold Jay 

      7 years ago from Saginaw, Michigan

      I found this useful. I don't anticipate any IRS debt, but it is nice to know this information. Thanks RJ


    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at:

    Show Details
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)