Tax relief is an umbrella term that refers to tax reduction strategies and programs to get relief from tax debts. Tax reduction strategies include claiming deductions and credits. Relief for tax debts includes penalty abatement, installment agreements, offers in compromise, and currently not collectible status.

Tax Solutions

IRS Tax Relief Solutions: Find the Right Solutions To Resolve Tax Problems

Frustrated woman in need of tax relief solutions

If you owe taxes or are dealing with other tax problems, there are proven IRS solutions to help. The IRS and state tax agencies understand that people fall behind for many reasons. They have created multiple tax debt solutions to make it possible to get back on track. The worst mistake is ignoring the problem. Acting quickly increases your options for relief.

Below, you’ll find the main solutions to tax problems—from payment plans to penalty abatement to spousal tax relief—and how to decide which fits your financial situation.

Tax Debt Solutions

Unpaid tax liabilities are the most common tax issues. Fortunately, the IRS offers several tax relief solutions depending on your ability to pay.

Installment Agreements (Payment Plans)

If you cannot pay your tax bill in full, an installment agreement lets you make monthly payments. These payment plans vary depending on your balance and financial situation. As long as you stay current, the IRS considers you in good standing even if you’re still paying your tax debt.

Offer in Compromise

An offer in compromise allows you to settle your tax return debt for less than you owe. This option is reserved for situations where the IRS believes it would be unfair to collect the full amount. It’s difficult to qualify, but for taxpayers who do, it can be one of the most powerful tax debt solutions.

Currently Not Collectible

If paying your tax balance would create extreme hardship, the IRS may mark your account as “currently not collectible.” This halts collection efforts until your financial situation improves.

Bankruptcy (When IRS Debt Qualifies)

In some cases, older income taxes can be discharged through bankruptcy. Strict rules apply, including waiting periods based on the tax year and when your tax return was filed. This path requires careful review by a tax attorney or bankruptcy professional.

Forgiveness Programs

The IRS does not technically have broad “forgiveness” programs, but people often use the term when referring to solutions like offers in compromise, hardship status, or penalty relief. Learn more by visiting our guides to each option.

Solutions for IRS Penalties

Tax penalties can make your tax liabilities grow quickly. The IRS does provide options to remove or reduce penalties through abatement.

General Penalty Abatement

If you’ve been charged penalties, you may be able to request removal through one of these options:

First-Time Abatement: For taxpayers who have filed and paid on time for the past three years, the IRS may remove certain penalties once.
Reasonable Cause Abatement: If special circumstances such as illness, natural disaster, or reliance on incorrect advice prevented you from paying your tax on time, you may qualify.
Abatement Letter: Typically, you must submit a written explanation or supporting documentation to request relief.

Requesting Abatement

To apply, you or your tax professional can contact the IRS by phone or in writing. Success depends on your history, the type of penalty, and your supporting evidence.

Solutions for Spousal Tax Problems

When filing a joint tax return, both spouses are normally responsible for the full tax bill. However, the IRS provides relief in certain cases.

Classic Innocent Spouse Relief::Shifts the liability to one spouse if the other spouse was responsible for the tax issue.
Separation of Liability Relief: Splits the balance between spouses after divorce or legal separation.
Equitable Relief: Available when other forms of relief don’t apply, but fairness demands protection for one spouse.
Injured Spouse Relief: Different from innocent spouse, this protects a spouse’s share of a tax refund when it would otherwise be used to pay the other spouse’s debts.

IRS Solutions for Special or Serious Situations

Some tax problems are more complex or risky. These require special strategies.

Voluntary Disclosure

The IRS Voluntary Disclosure Practice allows taxpayers with unreported crypto, offshore accounts, or hidden income to come forward. This program can help you resolve tax issues without facing criminal prosecution if you act before the IRS contacts you.

Suing the IRS

If administrative remedies fail, you may need to go to Tax Court or federal court. Options are limited by sovereign immunity, but litigation is possible in disputes over assessments, refunds, and certain penalties.

Tax Court Representation

Tax Court gives you the chance to dispute a liability before paying. It’s often the best route when you believe the IRS assessed your taxes incorrectly. Professional representation is strongly recommended.

Finding the Best IRS Tax Solutions / Professional Help

Choosing the right IRS tax solutions depends on your unique financial situation and goals. A qualified tax professional can evaluate your case and explain which path offers the best outcome.

At TaxCure, we connect taxpayers with professionals experienced in specific tax problems. Our resources include:

A guide to the best tax relief solutions.
Warnings about the worst tax relief companies and how to avoid scams.
Tools to filter professionals by your specific issue and agency.

Additional Resources

Want to learn more about tax relief solutions and how to resolve tax issues? Explore these resources:

What Is Tax Relief: An overview of how tax reduction and resolution programs work.
Understanding Tax Relief Services: Know what to expect (and avoid) when hiring help.
Guide to Tax Settlements: How to reduce or eliminate tax liabilities legally.
Taxpayer’s Guide to Tax Resolution Services: Step-by-step insights into finding and using the right IRSsolutions.