Is There Really a Tax Debt Relief Program?

Tax debt is a serious issue that impacts many Americans. Over 18 million taxpayers owe the IRS money, resulting in more than $300 billion in overdue taxes. Many people simply can’t afford to pay, many try to get around paying, and many set up installment agreements or other arrangements with the IRS to pay off their debt over time.

You may frequently hear about tax relief programs, just like any kind of debt relief initiative out there. However, there is no official IRS Tax Debt Relief Program, and usually, this kind of language is used by companies that are trying to attract clients who need tax resolution help.

Advertising campaigns change frequently to bring in the language of the moment, renaming existing services to get more taxpayer clients. However, with promises of the “best tax debt relief program,” it’s important to be aware of which messages are just advertising and which are legitimate IRS relief options. Consider the following.

Is There Really an IRS Tax Debt Relief Program?

The IRS does offer various forms of tax relief. These are real options you can pursue whenever you’re facing a tax issue, like being unable to cover your tax bill. 

However, there is no one comprehensive tax debt relief program. It won’t do you any good to call the IRS and ask for the tax relief program.

When you hear terms like national tax debt relief, new tax debt relief program, or zero tax debt relief program, you’re more than likely seeing a marketing message from a tax resolution firm. These companies essentially advertise that they can reduce your tax debts by taking advantage of the IRS’s tax debt relief programs. Some are not scams and can actually help you, while others are definitely scams.

So, the bottom line here: if you see “tax debt relief program,” you’re looking at an advertisement at best. 

Misleading terms and phrases for tax debt relief

Many tax resolution companies aren’t trying to do anything illicit. However, that doesn’t mean they don’t use misleading language when trying to get your business.

Because these companies frequently update their language, it’s good to know about other phrases to watch for and what common marketing campaigns incorporate. Here is a brief overview of common terms tax relief firms use aside from IRS tax debt relief: 

• IRS one-time forgiveness: This phrase actually refers to something the IRS calls first-time penalty abatement. If you make a mistake like failing to file your tax return or to pay your tax bill on time, and you have an otherwise good track record with the IRS, you should be able to get penalties waived. However, this doesn’t get rid of any tax debt you have. You still have to pay what you owe.
• IRS Fresh Start Program: In 2011, the government passed something called the Fresh Start Program, which made it easier for taxpayers to apply for tax relief. The program covered all the different relief options from the IRS. However, some tax firms make it sound like this is actually a relief program you can apply for, which isn’t the case.
• IRS hardship: This phrase is vague. Some programs offered by the IRS may apply if you are experiencing financial hardship. This includes the currently not collectible (CNC) status, which allows you to get your tax bill deferred until you can pay it—but not forgiven. Some bankruptcy cases could also temporarily stop collection.
• Zero tax relief program, or zero tax plan: These terms have been associated with tax-related scams in recent years. One method scammers have been using is leaving taxpayers a voicemail, claiming that you could be eligible for a new tax debt relief program from the government. Be wary of any type of call, email, or text that states anything about “zero tax relief” or really anything about tax debt relief.
• Pennies on the dollar: This is a classic marketing phrase used to bring you into tax resolution companies under false pretenses. Typically, the worst companies use this phrase. They’re saying that they will be able to settle your debt for “pennies on the dollar,” indicating that you won’t have to pay your full bill. However, only in some cases will the IRS allow you to settle your tax debt at a significantly lower amount than you owe, and it’s only if you have a legitimate hardship getting in the way of payment. A warning sign is if someone offers you this phrase before they even know about your finances or tax situation.

Other common components of these messages are that “time is running out” to get you to act fast, or the program is “a completely new IRS offering this year” or "IRS relief 2024". Those claims are usually false. 

Always be cautious when you hear from any person or company that uses these phrases and is not forthright about what they do. Don’t fall prey to false tax debt relief program calls. Talking to an actual tax attorney or CPA is a great first step when you’re not sure what to do about your tax debt.

Why Do Tax Resolution Companies Use All This Jargon?

It’s important to note that legitimate businesses often use this misleading language, not just scammers or people trying to commit tax fraud. However, this aggressive sales language tends to be the most popular with the big tax relief firms. Why do they do it? 

• It attracts customers: Many consumers want fast answers to tax questions, and they want someone else to take care of the fine details for them. This makes it pretty simple for companies to make big claims, get their attention, and do the complicated IRS work for them—even if it’s not exactly what they promised when getting leads.
• It prevents people from doing their own research: When taxpayers see these enticing phrases online, they stop searching for answers. They listen to someone who seems like they know what they’re talking about. They don’t look up the real programs on their own, which is a plus for tax resolution companies. 
• The IRS doesn’t always pop up first in search results: Many tax resolution firms utilize SEO strategies and tons of keywords, so their content appears high on the search engine results page. They focus on keywords that the IRS doesn't use. If they advertised real IRS programs, the IRS website would be at the top when people search for the program. However, if these companies use phrases that don't refer to real programs, they can dominate the top of the search results more easily.

Fortunately, both the IRS and TaxCure have tons of online resources to help taxpayers who want to solve their programs on their own or learn about the process before working with a tax professional. To protect yourself, always use a legitimate site to conduct your research and find tax help in your area. 

Legitimate IRS Relief Options

So, when you can break through all this marketing speak, what are your actual tax debt relief options when you can't pay taxes owed? The IRS offers several different types of arrangements to help you cover your tax bill. Remember that there is no one “relief program” that you can apply for that will wipe out your tax debt automatically. 

Let’s walk through each option to consider based on your unique circumstances:

Installment agreement

One of the most common forms of relief when you’re having trouble paying your tax bill is the payment plan or installment agreement. With this option, you contact the IRS about making your tax bill payments in installments instead of one lump-sum payment. You will have a specified period of time to pay off your balance with an agreed-upon monthly payment amount. 

Short-term payment plans are conducted within 180 days, and you must owe less than $100,000 for that option. Long-term payment plans may apply if you owe $50,000 or less, and these can last for longer periods of time, depending on your situation.

A partial payment installment agreement (PPIA) is a type of payment plan for when you’re unable to pay your full monthly payments in your existing installment agreement. The IRS may then allow you to make payments you can afford, which could lead to a lower balance overall.

Offer in compromise

The offer in compromise option may apply to you if you can’t pay your full tax liability because of your financial situation or some kind of hardship. The IRS considers each case based on your income and expenses, your assets, and your ability to pay what you owe. 

To qualify, you must be up to date on tax return filings, not be in a bankruptcy proceeding, have an extension in place, or be an employer that made tax deposits for the current and past two quarters.

Offers in compromise require Form 433-A for individuals or Form 433-B for businesses, Form 656, an application fee of $205, and your initial payment, or “offer,” that reflects what you can actually pay right now. You can decide to pay a lump sum or periodic payments with these offers.

First-time penalty abatement

The IRS offers something called first-time penalty abatement, or First Time Abate, as stated on their website. You can only apply for first-time penalty abatement if you receive a penalty because of failure to file, failure to pay, or failure to deposit. 

You also must have a history of good tax compliance. This means you have filed the same tax return type for the last three years and didn’t receive any penalties in those years.

Note that penalty abatement doesn’t clear your tax debt. It just waives certain qualifying penalties.

Currently not collectible (CNC) status

CNC status may be granted if you’re currently unable to pay your tax bill. The IRS makes this determination. However, your tax debt isn’t forgiven—it doesn’t just go away. The IRS just reports on your account that the debt is temporarily not collectible, but it will be owed again when your finances improve.

The IRS may ask you to complete Form 433-F, 433-A, or 433-B, along with documentation about your financial situation. Your debt will still accrue interest and penalties.

Forms of Spousal Relief

If you’re married and file jointly with your spouse, you may be eligible for spousal relief through the IRS when you’re having trouble handling your tax liability. There are two types to know: injured spouse relief and innocent spouse relief.

• Injured spouse relief: With this option, the IRS allows a taxpayer to avoid having their portion of the tax refund seized to pay their spouse's debts.
• Innocent spouse relief: For taxpayers who file jointly, this option allows one spouse to get relief from paying additional tax owed by their spouse because of errors in their joint return.

These could be viable options when you’re married and a mistake was made or your spouse is getting a refund back.

Dealing with False Tax Bill Information

Sometimes you may disagree with the information you see on your tax bill. It could be a simple mistake, but the mistake could mean you don’t really owe what the IRS sent you. 

What to do next: contact the IRS. If you received a notice, call the phone number on your notice. Keep all records, including notices, tax bills, and your submitted tax returns. Make sure you have documentation showing why you believe the tax bill is incorrect. The IRS will then review everything and, hopefully, adjust your tax bill accordingly.

Find Reliable Resources through TaxCure

So, what’s the best IRS tax debt relief program? Working with the IRS when you’re unable to pay what you owe. The more open and transparent you are with the agency, the better your long-term standing with them.

You never want to take a risk when getting help with tax debt. You could end up paying a company too much money for tasks you could do on your own. Or, worse, you could end up dealing with a tax debt relief program scam. 

Importantly, the IRS states that the agency will never call, text, or contact you on social media demanding that you make an immediate tax payment.

Go local with TaxCure. Search all our resources based on your specific problem, whether you’re facing penalties or dealing with tax debt. Find a professional who understands your situation and guides you tothe right solution. 

Don’t get duped by tax resolution firm marketing campaigns. Find reliable, legitimate professional assistance through the TaxCure network today. Using our website, you can search for local tax pros and you can narrow your results based on the pro's experience with certain problems and solutions.