Enrolled AgentNTPI FellowThe Tax Debt Detective909-570-1103

    What are the 5 Ways Out of IRS Debt (The IRS Already Picked a 6th for You)

    There are five ways to resolve IRS tax debt: pay in full (in a lump sum or through an installment agreement), a Partial Payment Installment Agreement, Currently Not Collectible status, an Offer in Compromise, and, in narrow cases, bankruptcy. The right option is decided by your income, your allowable expenses, and how much time is left on the IRS ten-year collection window, not by the first monthly amount the IRS quotes you. A Partial Payment Installment Agreement lets you pay what your finances actually support, and the oldest tax years can expire under the collection statute while you pay. If you do nothing, the IRS chooses for you and moves to liens, levies, wage garnishment, and possible passport revocation. Identifying which option fits requires pulling your records and running your financials against the expiration date of each year you owe.

    Watch Carlos break down the five ways out of IRS debt

    She was staring at a number. Four thousand dollars. Every month.

    The Collector handed it to her like a verdict. Pay this, or the machine keeps rolling.

    She was a real estate broker. Good years, lean years, the way commission income runs. Made real money when the market moved. Not four-thousand-a-month-to-the-IRS money. Nobody makes that.

    She thought that number was the only option she had.

    It wasn't. It never is.

    The Collector gives you five ways out. Five. Most people never get told what they are, so they take the first number thrown at them and assume it is the law.

    Here is the map she was never shown.

    Door one. Pay it in full. All at once, or dragged out through an installment agreement. This was the door she was standing in. The four-thousand-dollar door. The one closing on her chest.

    Door two. The Partial Payment Installment Agreement. You pay what you can actually afford, not what the IRS wishes you could. If an old tax year is close to expiring, they take the smaller number and the rest can run out the clock. Nobody talks about this door.

    Door three. Currently Not Collectible. When you cannot afford to live and pay them too, the levies stop. The garnishments stop. The debt just sits there while the clock keeps running.

    Door four. Offer in Compromise. Settle for less than you owe. The one every radio commercial screams about. The one the Promise Thief uses to sell you a dream on a first phone call. The one almost nobody actually qualifies for.

    Door five. Bankruptcy. A real option for certain tax debt. Narrow rules. Strict timing. The last resort in the building.

    Five doors. She was shoved through the worst one and told it was the only one.

    Then there is the sixth.

    The sixth is the one you pick by doing nothing. Ignore the mail. Tell yourself you will call when things settle down. Let the notices stack up on the counter.

    That is the Internal Bleeder talking. And while it whispers wait, the Collector walks right through the door you left open. Liens. Levies. Wage garnishment. A revoked passport.

    Most people choose that door without knowing they chose anything.

    She didn't. She came in.

    We did what we always do first. The triage. Pulled her real records. Total income. Actual expenses. The IRS allowable expenses. Every number that decides what you can pay versus what they want you to pay.

    Then we found her door. Door two. The Partial Payment.

    We went back to the Collector and requested just over three hundred and fifty dollars a month.

    Four thousand down to three-fifty.

    And here is the part that still gets me. Some of her debt was old. The IRS only gets ten years to collect. While she paid that small number, protected, the clock kept running on the oldest years.

    Some of that debt expired. On its own. She never paid it.

    She was never stuck with one option. She had five. She just needed someone to read the paperwork and show her the right door.

    You do not have five doors and no key. The key is knowing which door is yours before you sign for the wrong one.

    Call 909-570-1103 now, or go to CallTaxEA.com and tell me what the IRS sent you.

    If you want to read before you talk, start with the book at StopHidingFromIRS.com. Then call.

    The Collector does not take holidays. Neither do I.

    Call 909-570-1103