If you need help with IRS tax problems, then you’ve come to the right place. Forget Tax Debt is a free website dedicated to explaining how to get rid of your tax debt as quickly and cheaply as possible.
Created by the founder of Forget Student Loan Debt, Tim Marshall has studied IRS tax debt extensively, and he created this site to help Americans deal with back taxes, late payments, delinquencies, Offer in Compromise letters and other issues resulting from IRS tax debt.
The goal of this website is to help you figure out how to earn complete IRS Tax Debt Forgiveness, whether through the IRS Fresh Start Initiative, the Offer in Compromise process, a tax settlement, tax negotiations or a bankruptcy discharge, all without having to pay for the help of an expert.
Do You Owe IRS Back Taxes?
Are you facing IRS levies, penalties, late payments or other fees? Is the IRS garnishing your wages (or threatening to do so)? Have they placed a lien on your property, seized assets, denied or terminated installment agreements, or rejected your Offer in Compromise?
I’ve got good news – no matter what kind of tax problem you face, we can help. This website was built to guide people like you through the process of wiping out your tax debt, without having to spend any money to do so!
Common Tax-Related Problems
There’s a variety of common problems that people face when attempting to deal with the IRS, each of which requires very different strategies to resolve.
Depending on what sort of issue you’re facing, you’ll need to investigate available opportunities, weigh each opportunity against the others, and determine the best way to proceed with your situation.
Here’s a list of the most common tax problems faced by Americans in 2019:
- Unpaid Back Taxes
- Unaffordable IRS Full Payment Amounts, or Payment Plans
- Incomplete Tax Returns
- Late Tax Returns
- Owed Payroll Taxes (“941” Taxes)
- IRS Audits
- IRS Wage Garnishments
- IRS Liens on Assets
- Offshore Bank Accounts
- Innocent Spouses Facing Tax Penalties
- Victims of Investment Fraud
What Makes FTD Different?
While many websites focus on pitching Tax Resolution Companies, tax attorneys, or other specialty services, Forget Tax Debt is all about empowering you to achieve an excellent IRS Tax Debt Settlement, entirely for free!
If the IRS has contacted you requesting full payment of back taxes, or a payment plan that’ll ruin your financial future, then it’s time to buckle-down, study-up, and prepare for the battle of your life. Fortunately, we’re here to help.
How to Use This Site
Read through the pages of this website to find details about the most effective tax resolution strategies. If you can’t find a topic that you have a question about, please feel free to ask about it in the comments section below, and I’ll do my best to get you an answer within 24 hours.
Please note: I am not an attorney, a CPA, nor a former IRS taxman. I am simply a concerned citizen who wants to help others deal with a frustrating, stressful, confusing process. My advice is offered entirely for free, but in no way places any legal obligations or requirements on me.
How Much Do You Owe?
Depending on how much you owe the IRS, your options for dealing with your back taxes will be drastically different. Typically, it’s easier to get the IRS to compromise (and forgive outstanding debt), when it’s a lower amount.
The IRS is entirely overburdened by far too many cases of major tax fraud, significant underpayments and corporate tax dodging schemes to spend their limited resources battling it out with people who hardly owe a thing. And the good news for you is that you’re probably a small fish in a big pond…
If You Owe $10,000 Or Less
If your IRS tax debt is under $10,000, then you’re in the best possible position, especially if you have a “clean record” (meaning no previous tax penalties, fines, etc.), and you’ve filed all previous tax returns (especially if you filed them all on time!).
If you fit these requirements, your best bet for handling your IRS back taxes debt is to simply contact the IRS directly and request their standard 3-year payment plan that divides your debt into 36 small monthly installments.
Typically, this is the best solution for people who owe smaller amounts of back taxes (again, less than $10,000), as it’s far easier to pay back the debt when it’s been spread out over a 3 year period of time, rather than requiring the entire amount to be paid all at once.
If You Owe Between $10,000 and $20,000
If your IRS tax debt is between $10,000 and $20,000, then you’ve still got some good options for handling the debt, but you may end up needing to request assistance from an attorney, tax resolution specialist or tax debt relief company.
Unfortunately, the IRS takes debt at this level pretty seriously, and is typically far less likely to offer a quick path to resolution (like they provide to those people who owe under $10,000 in back taxes).
Should you find yourself in this category, my suggestion is to read through the pages of this site, paying close attention to the debt resolution, relief and especially the Offer in Compromise pages, which will shed insight on how you can renegotiate the debt you owe to the IRS.
If You Owe More Than $20,000
Unfortunately, if you owe over $20,000 in IRS back taxes, then you should consider yourself to be in the “big fish” category of IRS tax debtors, and you’re going to need to act accordingly.
When you owe a significant sum of money like this, the IRS is far less likely to negotiate your debt down, at least without the assistance of tax specialists, attorneys or debt resolution companies.
However, all hope is not lost, and there’s still potential to reach an effective tax settlement without having to spend any additional funds, as long as you’re willing to put in the time required to research and evaluate your available opportunities.
2019’s Best IRS Tax Relief Programs
There are a variety of options for dealing with IRS back taxes, each of which have their own pros and cons, which will need to be considered when deciding on your tax resolution strategy.
Whether you decide to use one, or many, of the options below, my recommendation is to read through all the programs before taking any action, because negotiating with the IRS is sometimes a one-shot thing; screwing it up on the first go-around could mean losing out on tens of thousands of dollars of savings.
Make sure to read through each of the options racked out below, thinking about which program applies best to your unique financial situation. If you have questions about any of these opportunities, please feel free to ask in the comments section below, and I’ll get you an answer as quickly as possible.
IRS Offer in Compromise
The Offer in Compromise is an excellent opportunity for anyone who owes more in back taxes, penalties, fines or other fees than they could reasonably hope to pay back.
OIC was developed to ensure that the IRS doesn’t lose all chance at collecting on money owed by large debtors, as it’s essentially a negotiation program that allows you to reduce your tax liabilities, making the IRS an offer to settle your debt for a smaller amount than you actually owe.
The most important thing to keep in mind when it comes to creating an Offer in Compromise is that the IRS has to accept the offer you’ve made, and that if you offer too small a sum, they’ll simply reject your suggestion and continue insisting that you pay back the full amount owed.
To get your Offer in Compromise approved by the IRS, the most important thing you’ll need to do is prove, beyond a reasonable doubt, that you cannot in any way pay back the full amount of money that you owe the IRS.
To increase the chance that your OIC is approved, it’s vital that you fully understand how the entire process works, and that you’ve read, understood, and considered the guidelines, enforcement standards and legal requirements involved.
This is precisely why many people insist that anyone submitting an OIC should consult with an attorney, tax specialist or tax resolution company for assistance; and of course, they’re right that bringing on a specialist will increase the chances of getting your OIC approved, but they’re wrong that it’s absolutely necessary.
For additional details on the process, please visit my page about the IRS Offer in Compromise program, where I’ll lay out the entire process in detail, providing you with the information you need to maximize the chances of having your application approved.
Delinquent Tax Returns
A substantial percentage of the people who have run into trouble with the IRS can lay at least partial blame for the problems on delinquent (late) tax returns, which quickly rack up penalties, fees, fines and other costs.
When it comes time to resolving your IRS tax problems, one of the most important things to consider is that the IRS will simply flat-out refuse to agree to any sort of settlement, reduction, or negotiation until all of your tax returns have been filed.
It may sound strange, but from the IRS point of view, they require you to file the returns so that they can determine how much you actually owe, and should be paying, before they’re going to start negotiating down your debt.
No matter how much you owe or how late your tax returns may be, the first step to getting your IRS debt settled is to determine just how much you’re supposed to have paid back.
However, don’t simply rush to file your late returns, as you may need to file your taxes in specific ways, based on the opportunities available to you for settlement, negotiation, and assistance.
Read through each of the programs outlined on this site before assembling your delinquent returns, thinking about which opportunities you can leverage, and how you can apply them to your debt, before submitting your late tax returns to the IRS.
Installment Payment Plans
Most people looking for IRS tax help will want to leverage some sort of installment payment plan to escape from their debt, and fortunately, the IRS is quite flexible when it comes to stretching out payments over a longer period of time.
Even people who only owe a few thousand (or sometimes even a few hundred) dollars are able to enroll in repayment plans that stretch their single lump-sum payment out over a longer period of time – typically something like 36 months, or 3 years, with the total amount owed being divided into much smaller monthly payments.
At the most basic level, the reason that installment payment plans are so useful to so many people is that they allow you to pay down your debt in much smaller increments, with more bills, but bills that are 1/36th the price of what the IRS originally demanded as a single lump-sum payment.
But perhaps the best part about installment repayment plans is that as soon as the IRS agrees to your proposal, any levies, liens, garnishments and seizure will be put on hold, and effectively cancelled for good, unless you violate the conditions agreed upon in the new repayment plan.
Another important thing to note is that once you’ve agreed to a new structured installment payment plan, you will be expected to make the monthly payments on time, in full, and to file all of your future tax returns on time as well.
Any failure to live up to the conditions of the installment payment plan could lead to additional penalties, fines, fees, etc., and a debt that balloons back to the original amount owed. Put quite simply, it’s incredibly important to make sure that you live up to whatever negotiated settlement agreement you make with the IRS.
Tax Debt Bankruptcy Discharges
Tax debt can be discharged by filing for bankruptcy, though not in all cases. If you owe a massive back tax debt, and especially if that debt that stems from a time when you were making significantly more money than you do now, then bankruptcy may be a an option, though it’ll depend on your unique situation.
One of the first things the IRS does to people who owe back taxes and who have not put an installment payment plan in place is to begin garnishing their wages, which means that part of your paycheck is automatically withheld and sent directly to them.
This can be a terrible situation, especially for anyone who’s struggling financially, and can lead to all sorts of issues, like the inability to make your rent or mortgage payments, car payments, student loan payments, credit card payments, etc., effectively killing your finances.
If you’re facing the threat of a wage garnishment, or if the IRS is already garnishing your wages, then it’s time to take action on your back tax debt, and start working toward a full resolution with the IRS.
The first thing you’ll need to do is find out exactly how much you owe, then start drafting up your proposal for an Offer in Compromise, or other installment repayment plan, which you’ll need to submit for IRS approval.
Again, most websites are going to suggest that you pay someone else to handle this part of the process for you, but I understand that many people who read this material won’t have the funds available to spend it on an expensive tax attorney or debt settlement company who can lobby on their behalf.
By reading through this site and investigating your options for negotiating your back tax debt, you’ll learn how to put together a good offer that the IRS is likely to approve. And the good news? As soon as the IRS approves your Offer in Compromise or structured installment payment plan, the wage garnishments will stop.
Bank levies are used by creditors attempting to collect debt, and the IRS is the world’s biggest user of this tool, which freezes your bank account, locking your money away from you, and allowing them to take it for themselves.
It may sound entirely draconian, but technically, the IRS has all sorts of authority to collect back taxes owed, and bank levies are one of their most effective means for doing so. If the IRS has determined that you aren’t going to play ball, then they will literally seize your bank account (or bank accounts), and taking your money directly from those accounts.
Obviously, it couldn’t get much worse than having the IRS take control of your accounts – the same accounts you use to pay bills, buy groceries, etc. – so you’ll want to do anything and everything you can to avoid this dramatic outcome, including contacting the IRS soon after being notified of your tax problems and beginning negotiations to reduce your back tax debt, or to get you set up on an affordable monthly installment repayment plan.
If the IRS is threatening to take your account, or if they’ve already seized it, then you’ll need to study on on IRS Bank Levies and learn about how to prevent having your accounts seized, or how to get your accounts back.
Tax liens are used by the IRS to ensure they’re able to recollect your back tax debt. Tax liens work like an IOU, except that they’re written by the IRS, and enforced without mercy.
If the IRS determines that you’re not working to pay back the debt you owe them, and they’re aware of some asset that you own and control, then they can slap a tax lien on it that basically says “If and when you sell this asset, we’re taking some percentage of the value before you get paid for it”.
Typically, tax liens are applied to real estate, like a house, or other piece of property, and the lien is collected at the time of the sale.
While tax liens give you some breathing room (and may not bother people in certain financial situations), they can be devastating to ordinary people who still need to rely on credit in order to finance their daily lives.
Having a tax lien applied to your property is going to destroy your credit score, and the lien will remain on your score for as long as you owe back taxes, so the best way to deal with the lien and repair your credit is to repay the outstanding debt.
Tax liens don’t always come from the IRS, as they could also be issued by State or even County Tax Boards, so the first thing you’ll want to do if you’re hit with a tax lien is determine who set it in place, then start thinking about how to get rid of it.
When you fail to pay your taxes in full, the first thing that’ll happen is the IRS will start racking up financial penalties, late fees and fines, which end up making your debt substantially larger than it began, and could prevent you from being able to ever escape from the financial black hole.
Fortunately, it’s possible to get the IRS to drop these penalties by negotiating with them to repay your debt. In some cases, especially where incomes or other financial situations have changed dramatically from the time you racked up the debt to the time that you owe it, it can even be outright easy to get the IRS to agree to a penalty abatement or alleviation plan.
Tax penalty abatement is considered on an individual basis, with the IRS reviewing your particular financial situation to determine whether or not they’ll approve your request to have penalties, fines and other fees reduced, or even forgiven entirely, so I can’t make any promises that you’re eligible for the assistance, but I will teach you how to maximize your chances of getting the petition approved.
The most important thing to understand about tax penalty abatement is that you’ve got to explain your argument for why you deserve the relief with a “reasonable cause argument”, or prove that your particular situation falls in one of the IRS approved legally defined categories where abatement is offered.
Currently Not Collectible
In back tax cases where you owe significantly more money than you could actually pay back, it’s possible to report your debt as Currently Not Collectible, which is similar to requesting an extension on your taxes.
When you report to the IRS that your tax debt is Currently Not Collectible, you’ll need to prove not only that it’s literally impossible for you to make the payments they’ve demanded, but you’ll also want to offer some kind of compromise plan that shows them you’re willing to pay back at least some of your debt.
If you can convince the IRS that you’re unable to pay whatever back taxes you owe, and they trust that you’re going to make good on your debt as soon as you’re able, then you’ll be able to earn a deferment that gives you the breathing room to build up your finances without any additional penalties, fees or fines accumulating on your debt.
Back Taxes Statute of Limitations
If you’re one of the lucky people who owes back taxes from many moons ago, it’s possible to wipe out your tax debt entirely by proving that the debt is so old that the IRS has no right to continue pursuing your debt.
This process is officially called “Collection Statute Expiration”, and it stipulates that any debt owed from tax liabilities or IRS audits which are older than 10 years no longer needs to be repaid.
Many people who owe significant sums of money to the IRS aren’t even aware that there’s a statute of limitations on their taxes, and end up wasting time, money and energy attempting to get out of paying off debt that literally has no right to exist in the first place.
There may be no scarier letter than the official IRS Audit notification, which for most people, means they’re about to spend months (or sometimes years) dealing with one of the most frustrating processes possible… defending themselves from an IRS Tax Auditor.
No matter who you are or how much you owe, the IRS Auditors can be ruthless in their application of the law, and they’re fully-enabled to turn your world upside down in order to determine whether or not you’re a tax cheat.
Regardless of how much you make, how much you report, or how you go about filing your taxes, it’s important to understand the tax auditing process so that you can keep yourself prepared for the potential doomsday scenario of the dreaded Audit notice.
Freedom of Information Requests
Did you know that you can use Freedom of Information Requests to find out what details the IRS has collected about you? Want to figure out how exactly they determined what you owe them?
FOI laws were created to allow individuals to access public data held by the Federal Government, and since the IRS is part of that Government, you can use Freedom of Information Requests to see how they calculated your back taxes owed, how they’ve determined what penalties, fees, fines, and interest should apply to your debt, and look for problems that would allow you to reduce or even wipe out the money that they’re demanding.
Freedom of Information Requests are especially important in complicated, high-value cases, where many assets, companies, accounts, etc. are involved in determining your tax liabilities, because the more complications that are included in your case, the more likely it is that mistakes were made while calculating your outstanding tax debt.
Offshore Bank Accounts
Swiss Bank Accounts used to be a no-brainer for high-net worth individuals looking to create tax shelters, but in the modern Globalized era, there’s virtually nowhere to go without risking being caught by the IRS.
If you are still utilizing Offshore Bank Accounts to reduce your tax burden, it’s time to reevaluate the strategy, investigate recent legal cases, current laws, and determine whether or not you need to report these offshore funds to the IRS.
Allowing the IRS to find your accounts without reporting them in the first place is the worst case scenario, as it’s the most surefire way to be labelled a tax cheat, and to get hit by criminal prosecution, fines, fees and other penalties.
But before we move on, I do want to be crystal clear about one thing: I do not advocate for any sort of tax cheating strategies, as weaseling out of your tax liabilities is not only illegal, but also immoral. Whether you want to or not, legally, you are obligated to report all funds under your control, including those stashed away in Offshore Accounts.
Payroll Tax Problems
Many businesses run into trouble with Payroll Taxes, but like personal tax issues, most cases do present several opportunities for tax reduction before it becomes a major problem.
The IRS is far more serious about collecting taxes from businesses than they are about collecting from individuals, so if you’re got a payroll tax issue, then you need to address it before things get out of control.
Do not think that you can ignore business tax issues, especially payroll tax problems, because the IRS will come after you, and far more quickly than they’d go after individual tax payers.
Our entire tax system is built on the premise that everyone pays their fair share, and the IRS loves making examples of small (and large) businesses in order to remind individual Americans that they can’t ignore their tax responsibilities.
Investment Fraud Victims
Sometimes, people get caught in a terrible trap where they owe taxes on nonexistent profits that resulted from some sort of financial fraud.
The most recent, high-visibility version of this would be the Bernie Madoff Ponzi scheme, which was supposed to pay back great returns for investors, but ended up wiping out significant sums of money from many prominent (and a much larger number of not-so-prominent) people.
The IRS offers a sort of relief program for people who’ve been taken by this sort of thing, and allows eligible individuals to write off something like 30-40% of their losses due to investment fraud schemes.
Understanding how to take advantage of this program could save you substantial sums of money, including reducing your next tax bill by getting credit for taxes paid in years past, as well as collecting interest on the amount of money that you “overpaid” due to the fraudulent investment scheme.
Tax Identity Recovery
Unfortunately, each year uncovers more cases of identity theft and resulting tax fraud than ever before, with thousands of individual Americans affected in some way by thieves stealing their hard-earned money via fraudulent tax returns.
Fortunately, there is a way to resolve identity theft cases that impact your tax liabilities, and I’ll help you understand not just how to deal with it after the fact, but how to actively prevent it from occurring in the first place.
If you’ve had your identity stolen, or if you’re simply worried about it happening, then please visit my page on tax identity theft for best practices on dealing with the issue.
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Disclaimer: Information obtained from Forget Tax Debt is for educational purposes only. You should consult a licensed financial professional before making any financial decisions. This site receives some compensation through affiliate relationships. This site is not endorsed or affiliated with the U.S. Department of the Treasury, the IRS or any other Government Organization.