What Is The IRS Fresh Start Program

Negotiating tax debt with the IRS can be a way to reduce your burden and avoid harsh penalties or collection actions. Here’s a clear overview of how it works and options you might explore:

How to Negotiate Tax Debt with the IRS

1. Understand Your Debt

Get a current statement of your tax debt from the IRS by requesting a Tax Account Transcript.
Review the amount, penalties, interest, and collection notices.

2. Know Your Options

A. Offer in Compromise (OIC)

Allows you to settle your tax debt for less than you owe if you can prove paying the full amount would cause financial hardship.
Requires submitting Form 656 and a detailed financial statement.
Not everyone qualifies—IRS uses strict criteria based on your income, assets, and expenses.

B. Installment Agreement

A payment plan where you pay your debt in monthly installments.
Can be short-term (up to 120 days) or long-term (over 120 days).
Usually requires submitting Form 9465.

C. Currently Not Collectible Status

If you can’t pay anything now, you can request the IRS to temporarily delay collection.
Interest and penalties continue to accrue, but IRS pauses aggressive collections.

D. Penalty Abatement

You can request removal or reduction of penalties for reasonable cause (e.g., illness, natural disaster).
Penalties include failure-to-file and failure-to-pay.

3. Prepare Your Financial Information

Gather documentation: pay stubs, bank statements, monthly expenses, assets, debts.
Be honest and accurate—misleading the IRS can cause more trouble.

4. Communicate with the IRS

Contact the IRS early to discuss your options (call the number on your notice or visit IRS.gov).
Consider hiring a tax professional or attorney, especially for OIC negotiations.

5. Submit Your Application or Agreement

Complete the required forms carefully.
For OIC, include the application fee and initial payment unless you qualify for a waiver.

6. Stay Compliant

File all required tax returns on time.
Make all payments agreed upon.
Avoid new tax debts during negotiations.

7. If Your Offer is Rejected

You can appeal within 30 days.
Alternatively, consider other payment options or consult a tax professional.

Tips for Successful Negotiation

Be proactive—don’t ignore IRS notices.
Keep detailed records of all communications.
Don’t promise more than you can realistically pay.
Use IRS payment calculators to determine reasonable offers.

Tax Settlement in Mesa, Arizona

If you need IRS Debt Help, Tax Debt Settlements or Tax Debt Advising in Phoenix, Mesa or anywhere else, Tax Debt Advisors can help! Give us a call at 480-926-9300 or fill out our contact form for a free consultation. This family owned tax practice has been serving the public since all the way back in 1977!

Negotiating Tax Debt With The IRS