[{"@context":"https:\/\/schema.org\/","@type":"Article","@id":"https:\/\/moneydoneright.com\/taxes\/tax-relief\/tax-debt-relief\/#Article","mainEntityOfPage":"https:\/\/moneydoneright.com\/taxes\/tax-relief\/tax-debt-relief\/","headline":"8 Ways to Get Tax Debt Relief","name":"8 Ways to Get Tax Debt Relief","description":"Tax debt relief is a term used to describe the various programs and methods...","datePublished":"2022-12-01","dateModified":"2023-04-07","author":{"@type":"Person","@id":"https:\/\/moneydoneright.com\/author\/logan-allec\/#Person","name":"Logan Allec, CPA","url":"https:\/\/moneydoneright.com\/author\/logan-allec\/","identifier":4,"image":{"@type":"ImageObject","@id":"https:\/\/secure.gravatar.com\/avatar\/6e74dd0453a5871d1dcfde6d40d9494765ca8bfdb01927cefee4564d4bee9075?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/6e74dd0453a5871d1dcfde6d40d9494765ca8bfdb01927cefee4564d4bee9075?s=96&d=mm&r=g","height":96,"width":96}},"publisher":{"@type":"Organization","name":"Money Done Right","logo":{"@type":"ImageObject","@id":"https:\/\/moneydoneright.com\/wp-content\/uploads\/Money-Done-Right-Personal-Finance-and-Investing-Blog.png","url":"https:\/\/moneydoneright.com\/wp-content\/uploads\/Money-Done-Right-Personal-Finance-and-Investing-Blog.png","width":488,"height":60}},"image":{"@type":"ImageObject","@id":"https:\/\/moneydoneright.com\/wp-content\/uploads\/Tax-Debt-Relief.jpg","url":"https:\/\/moneydoneright.com\/wp-content\/uploads\/Tax-Debt-Relief.jpg","height":460,"width":1900},"url":"https:\/\/moneydoneright.com\/taxes\/tax-relief\/tax-debt-relief\/","video":[{"@context":"http:\/\/schema.org\/","@type":"VideoObject","@id":"https:\/\/www.youtube.com\/watch?v=Ti63ecXv4G4#VideoObject","contentUrl":"https:\/\/www.youtube.com\/watch?v=Ti63ecXv4G4","name":"Tax Debt Relief EXPLAINED: Here Are the 8 IRS Tax Debt Relief Programs","description":"\u27a1\ufe0f Request your FREE tax relief consultation at https:\/\/choicetaxrelief.com\/free-tax-relief-consultation\/\n\nIf you owe the IRS or even your state, you have probably have heard about tax debt relief.  While it's not true that everybody qualifies for a complete elimination of all their tax debt, tax debt relief is available to most Americans, and you will likely be able to take advantage of at least one of the eight tax debt relief programs I go over in this video.  Note that the focus of these tax debt relief programs is income tax debt relief, but some of these strategies can be used for payroll tax debt relief as well if the payroll tax debt has been assessed against you personally.\n\n\u2b07\ufe0f Free E-Book:\n- 7 Secrets About Your Tax Debt the IRS Doesn't Want You to Know: https:\/\/choicetaxrelief.ac-page.com\/secrets-about-your-tax-debt-the-irs-doesnt-want-you-to-know\/\n\n\u2b07\ufe0f Other Videos Mentioned:\n- How to Get an Offer in Compromise Approved: https:\/\/youtu.be\/o68m48NwY68\n- Currently Not Collectible (CNC) Status: https:\/\/youtu.be\/yHpCiTLrlCs\n- Installment Agreements Explained: https:\/\/youtu.be\/u64o8fZSPIA\n- How to File Back Tax Returns: https:\/\/youtu.be\/l4nj4ceBz_o\n- All My Tax Relief Videos: https:\/\/youtube.com\/playlist?list=PLHmwDU0qD1fj_JQAqO7aczwsrtLfWOSfQ\n\nTable of Contents:\n0:00 8 Ways to Get Tax Debt Relief\n1:02 Offer in Compromise\n3:36 CNC status\n8:05 PPIA\n12:07 Regular Installment Agreement\n13:32 Penalty Abatement\n16:08 Innocent Spouse Relief\n20:22 Bankruptcy\n26:37 Liability Contest\n\n#taxrelief #taxdebt #taxresolution","thumbnailUrl":["https:\/\/i.ytimg.com\/vi\/Ti63ecXv4G4\/default.jpg","https:\/\/i.ytimg.com\/vi\/Ti63ecXv4G4\/mqdefault.jpg","https:\/\/i.ytimg.com\/vi\/Ti63ecXv4G4\/hqdefault.jpg","https:\/\/i.ytimg.com\/vi\/Ti63ecXv4G4\/sddefault.jpg","https:\/\/i.ytimg.com\/vi\/Ti63ecXv4G4\/maxresdefault.jpg"],"uploadDate":"2023-01-25T18:41:02+00:00","duration":"PT29M37S","embedUrl":"https:\/\/www.youtube.com\/embed\/Ti63ecXv4G4","publisher":{"@type":"Organization","@id":"https:\/\/www.youtube.com\/channel\/UCQ9WUXlSuLlbi5BLkgtEUEA#Organization","url":"https:\/\/www.youtube.com\/channel\/UCQ9WUXlSuLlbi5BLkgtEUEA","name":"Logan Allec","description":"Logan Allec is a CPA and the founder of Choice Tax Relief, which specializes in helping people with their IRS and state tax debt.","logo":{"url":"https:\/\/yt3.ggpht.com\/43_VKqrbO06RGMcxfdQbDXosrkVRq1yf5QgSQEiR4ILUGWV9fJtTh0o2ftYMYqVo6PwnEOPRdg=s800-c-k-c0x00ffffff-no-rj","width":800,"height":800,"@type":"ImageObject","@id":"https:\/\/www.youtube.com\/watch?v=Ti63ecXv4G4#VideoObject_publisher_logo_ImageObject"}},"potentialAction":{"@type":"SeekToAction","@id":"https:\/\/www.youtube.com\/watch?v=Ti63ecXv4G4#VideoObject_potentialAction","target":"https:\/\/www.youtube.com\/watch?v=Ti63ecXv4G4&t={seek_to_second_number}","startOffset-input":"required name=seek_to_second_number"},"interactionStatistic":[[{"@type":"InteractionCounter","@id":"https:\/\/www.youtube.com\/watch?v=Ti63ecXv4G4#VideoObject_interactionStatistic_WatchAction","interactionType":{"@type":"WatchAction"},"userInteractionCount":4897}],{"@type":"InteractionCounter","@id":"https:\/\/www.youtube.com\/watch?v=Ti63ecXv4G4#VideoObject_interactionStatistic_LikeAction","interactionType":{"@type":"LikeAction"},"userInteractionCount":150}]},{"@context":"http:\/\/schema.org\/","@type":"VideoObject","@id":"https:\/\/www.youtube.com\/watch?v=o68m48NwY68#VideoObject","contentUrl":"https:\/\/www.youtube.com\/watch?v=o68m48NwY68","name":"How to Get an Offer in Compromise APPROVED in 10 Steps!","description":"\u27a1\ufe0f Request your FREE tax relief consultation at https:\/\/choicetaxrelief.com\/free-tax-relief-consultation\/\n\nThe IRS REJECTS the majority of offers in compromise submitted \u2014 56% to be exact!  However, the truth is that many of these rejected offers in compromise were submitted by taxpayers or even tax professionals who quite frankly didn't know what they were doing.  But I don't want that to be you!  I want the IRS to accept your offer in compromise with flying colors!  So in this video, I tell you the steps you need to take to get your offer in compromise accepted by the IRS!\n\n\u2b07\ufe0f Free E-Book:\n- 7 Secrets About Your Tax Debt the IRS Doesn't Want You to Know: https:\/\/choicetaxrelief.ac-page.com\/secrets-about-your-tax-debt-the-irs-doesnt-want-you-to-know\/\n\n\u2b07\ufe0f Other Videos Mentioned:\n- Offer in Compromise Explained: https:\/\/youtu.be\/tR3uaqJE86o\n- Offer in Compromise Formula: https:\/\/youtu.be\/1jDj6yHnjMI\n- All My Tax Relief Videos: https:\/\/youtube.com\/playlist?list=PLHmwDU0qD1fj_JQAqO7aczwsrtLfWOSfQ\n\nTable of Contents:\n0:00 How to Get an Offer in Compromise Approved\n0:23 Step #1\n1:04 Step #2\n2:30 Step #3\n6:33 Step #4\n7:23 Step #5\n10:20 Step #6\n11:42 Step #7\n12:39 Step #8\n13:23 Step #9\n14:09 Step #10\n\n#offerincompromise #taxrelief #taxhelp","thumbnailUrl":["https:\/\/i.ytimg.com\/vi\/o68m48NwY68\/default.jpg","https:\/\/i.ytimg.com\/vi\/o68m48NwY68\/mqdefault.jpg","https:\/\/i.ytimg.com\/vi\/o68m48NwY68\/hqdefault.jpg","https:\/\/i.ytimg.com\/vi\/o68m48NwY68\/sddefault.jpg","https:\/\/i.ytimg.com\/vi\/o68m48NwY68\/maxresdefault.jpg"],"uploadDate":"2022-11-30T17:09:15+00:00","duration":"PT15M23S","embedUrl":"https:\/\/www.youtube.com\/embed\/o68m48NwY68","publisher":{"@type":"Organization","@id":"https:\/\/www.youtube.com\/channel\/UCQ9WUXlSuLlbi5BLkgtEUEA#Organization","url":"https:\/\/www.youtube.com\/channel\/UCQ9WUXlSuLlbi5BLkgtEUEA","name":"Logan Allec","description":"Logan Allec is a CPA and the founder of Choice Tax Relief, which specializes in helping people with their IRS and state tax debt.","logo":{"url":"https:\/\/yt3.ggpht.com\/43_VKqrbO06RGMcxfdQbDXosrkVRq1yf5QgSQEiR4ILUGWV9fJtTh0o2ftYMYqVo6PwnEOPRdg=s800-c-k-c0x00ffffff-no-rj","width":800,"height":800,"@type":"ImageObject","@id":"https:\/\/www.youtube.com\/watch?v=o68m48NwY68#VideoObject_publisher_logo_ImageObject"}},"potentialAction":{"@type":"SeekToAction","@id":"https:\/\/www.youtube.com\/watch?v=o68m48NwY68#VideoObject_potentialAction","target":"https:\/\/www.youtube.com\/watch?v=o68m48NwY68&t={seek_to_second_number}","startOffset-input":"required name=seek_to_second_number"},"interactionStatistic":[[{"@type":"InteractionCounter","@id":"https:\/\/www.youtube.com\/watch?v=o68m48NwY68#VideoObject_interactionStatistic_WatchAction","interactionType":{"@type":"WatchAction"},"userInteractionCount":6717}],{"@type":"InteractionCounter","@id":"https:\/\/www.youtube.com\/watch?v=o68m48NwY68#VideoObject_interactionStatistic_LikeAction","interactionType":{"@type":"LikeAction"},"userInteractionCount":195}]},{"@context":"http:\/\/schema.org\/","@type":"VideoObject","@id":"https:\/\/www.youtube.com\/watch?v=yHpCiTLrlCs#VideoObject","contentUrl":"https:\/\/www.youtube.com\/watch?v=yHpCiTLrlCs","name":"Currently Not Collectible Status Explained | How to Get In CNC Status","description":"\u27a1\ufe0f Request your FREE tax relief consultation at https:\/\/choicetaxrelief.com\/free-tax-relief-consultation\/\n\nToday I am talking about IRS currently not collectible status (CNC), also known as IRS non-collectible status or uncollectible status.  If a client doesn't qualify for an offer in compromise \u2014 perhaps due to having too much equity in their home \u2014 a viable alternative may be placing them in currently not collectible status.  And in some cases, placing a client in CNC status may actually yield a *better* result than securing an offer in compromise for them.  It all really depends on the client's situation and how much they owe!\n\n\u27a1\ufe0f My Tax Relief Video Playlist: https:\/\/youtube.com\/playlist?list=PLHmwDU0qD1fj_JQAqO7aczwsrtLfWOSfQ\n\nTable of Contents:\n0:00 The Power of the IRS to Collect Taxes\n3:38 IRS Notice CP14\n4:04 IRS Notice CP501\n4:38 IRS Notice CP503\n4:50 IRS Notice CP504\n5:35 IRS Notice LT11\n6:08 Notice of Federal Tax Lien (NFTL)\n8:00 The IRS Wants What\u2019s Theirs\n8:36 What Is IRS Currently Not Collectible (CNC) Status?\n10:44 Effect of CNC Status on Wage Garnishments\n11:18 What Does the IRS Get Out of CNC Status?\n12:04 Currently Not Collectible vs. Offer in Compromise\n14:22 Running Out the IRS\u2019s 10-Year Collection Statute With CNC Status\n16:58 Don\u2019t Be Afraid to Talk to the Manager!\n17:50 Consider All Your Tax Relief Options\n19:59 Passport Revocation and CNC Status\n21:57 How to Get Into CNC Status\n24:04 How to Show Hardship to the IRS to Qualify for CNC Status\n26:50 Can You Still Qualify for CNC Status if You Have Home Equity?\n27:56 Limited Exceptions When Form 433-A or Form 433-F Is Not Required\n28:23 Why You Might Get Kicked Out of Currently Not Collectible Status\n31:22 CNC Status In Summary\n\n#taxrelief #taxhelp #irs","thumbnailUrl":["https:\/\/i.ytimg.com\/vi\/yHpCiTLrlCs\/default.jpg","https:\/\/i.ytimg.com\/vi\/yHpCiTLrlCs\/mqdefault.jpg","https:\/\/i.ytimg.com\/vi\/yHpCiTLrlCs\/hqdefault.jpg","https:\/\/i.ytimg.com\/vi\/yHpCiTLrlCs\/sddefault.jpg","https:\/\/i.ytimg.com\/vi\/yHpCiTLrlCs\/maxresdefault.jpg"],"uploadDate":"2022-05-19T19:09:39+00:00","duration":"PT33M24S","embedUrl":"https:\/\/www.youtube.com\/embed\/yHpCiTLrlCs","publisher":{"@type":"Organization","@id":"https:\/\/www.youtube.com\/channel\/UCQ9WUXlSuLlbi5BLkgtEUEA#Organization","url":"https:\/\/www.youtube.com\/channel\/UCQ9WUXlSuLlbi5BLkgtEUEA","name":"Logan Allec","description":"Logan Allec is a CPA and the founder of Choice Tax Relief, which specializes in helping people with their IRS and state tax debt.","logo":{"url":"https:\/\/yt3.ggpht.com\/43_VKqrbO06RGMcxfdQbDXosrkVRq1yf5QgSQEiR4ILUGWV9fJtTh0o2ftYMYqVo6PwnEOPRdg=s800-c-k-c0x00ffffff-no-rj","width":800,"height":800,"@type":"ImageObject","@id":"https:\/\/www.youtube.com\/watch?v=yHpCiTLrlCs#VideoObject_publisher_logo_ImageObject"}},"potentialAction":{"@type":"SeekToAction","@id":"https:\/\/www.youtube.com\/watch?v=yHpCiTLrlCs#VideoObject_potentialAction","target":"https:\/\/www.youtube.com\/watch?v=yHpCiTLrlCs&t={seek_to_second_number}","startOffset-input":"required name=seek_to_second_number"},"interactionStatistic":[[{"@type":"InteractionCounter","@id":"https:\/\/www.youtube.com\/watch?v=yHpCiTLrlCs#VideoObject_interactionStatistic_WatchAction","interactionType":{"@type":"WatchAction"},"userInteractionCount":10769}],{"@type":"InteractionCounter","@id":"https:\/\/www.youtube.com\/watch?v=yHpCiTLrlCs#VideoObject_interactionStatistic_LikeAction","interactionType":{"@type":"LikeAction"},"userInteractionCount":394}]},{"@context":"http:\/\/schema.org\/","@type":"VideoObject","@id":"https:\/\/www.youtube.com\/watch?v=u64o8fZSPIA#VideoObject","contentUrl":"https:\/\/www.youtube.com\/watch?v=u64o8fZSPIA","name":"IRS Installment Agreements EXPLAINED | How IRS Payment Plans Work","description":"\u27a1\ufe0f Request your FREE tax relief consultation at https:\/\/choicetaxrelief.com\/free-tax-relief-consultation\/\n\nToday I am talking about IRS installment agreements, also known as IRS payment plans.  \n\n\u27a1\ufe0f IRS Tax Relief: Do you owe the IRS more than $10,000 in back taxes?  Call 866-8000-TAX (866-8000-829) or email me at taxrelief@loganallec.com and let me know how much you owe to the IRS \/ state as well as your phone number.\n\n\u27a1\ufe0f My Tax Relief Video Playlist: https:\/\/youtube.com\/playlist?list=PLHmwDU0qD1fj_JQAqO7aczwsrtLfWOSfQ\n\n\u27a1\ufe0f My Tax Relief Company: https:\/\/choicetaxrelief.com\/\n\n\u2b07\ufe0f Other Tax Relief Videos Mentioned in This Video:\n- Tax Relief Basics: https:\/\/youtu.be\/62TcXIEtKnQ\n- Offer in Compromise Basics: https:\/\/youtu.be\/tR3uaqJE86o\n- Offer in Compromise Formula: https:\/\/youtu.be\/1jDj6yHnjMI\n- How to File Back Taxes: https:\/\/youtu.be\/l4nj4ceBz_o\n- CNC Status Basics: https:\/\/youtu.be\/yHpCiTLrlCs\n\nTable of Contents:\n0:00 What Are IRS Installment Agreements?\n2:39 Installment Agreements and Collection Activities\n4:47 Installment Agreements and Notice of Federal Tax Lien\n5:58 Installment Agreements and Tax Compliance\n6:40 Installment Agreements and Current Tax Liabilities\n7:06 Installment Agreements and Tax Refunds\n7:26 Installment Agreements and Penalties and Interest\n7:51 Installment Agreement Fees\n8:35 Are Installment Agreements Guaranteed?\n9:18 Installment Agreement Rejection Appeals\n9:50 Installment Agreements and the Collection Statute of Limitations\n11:08 Installment Agreement Payment Options\n11:22 How to Request an IRS Installment Agreement\n12:26 Requirements For a Legitimate IRS Installment Agreement Request\n13:17 Standardized Ways to Request an Installment Agreement\n13:54 How to Request an IRS Installment Agreement Online\n16:19 Streamlined Installment Agreements\n16:52 Guaranteed Installment Agreements\n17:25 Using Form 9465 to Request an Installment Agreement\n18:07 Form 433-F \/ Collection Information Statements\n18:45 Partial-Payment Installment Agreements\n\n#taxrelief #taxhelp #irs","thumbnailUrl":["https:\/\/i.ytimg.com\/vi\/u64o8fZSPIA\/default.jpg","https:\/\/i.ytimg.com\/vi\/u64o8fZSPIA\/mqdefault.jpg","https:\/\/i.ytimg.com\/vi\/u64o8fZSPIA\/hqdefault.jpg","https:\/\/i.ytimg.com\/vi\/u64o8fZSPIA\/sddefault.jpg","https:\/\/i.ytimg.com\/vi\/u64o8fZSPIA\/maxresdefault.jpg"],"uploadDate":"2022-05-27T21:57:26+00:00","duration":"PT21M38S","embedUrl":"https:\/\/www.youtube.com\/embed\/u64o8fZSPIA","publisher":{"@type":"Organization","@id":"https:\/\/www.youtube.com\/channel\/UCQ9WUXlSuLlbi5BLkgtEUEA#Organization","url":"https:\/\/www.youtube.com\/channel\/UCQ9WUXlSuLlbi5BLkgtEUEA","name":"Logan Allec","description":"Logan Allec is a CPA and the founder of Choice Tax Relief, which specializes in helping people with their IRS and state tax debt.","logo":{"url":"https:\/\/yt3.ggpht.com\/43_VKqrbO06RGMcxfdQbDXosrkVRq1yf5QgSQEiR4ILUGWV9fJtTh0o2ftYMYqVo6PwnEOPRdg=s800-c-k-c0x00ffffff-no-rj","width":800,"height":800,"@type":"ImageObject","@id":"https:\/\/www.youtube.com\/watch?v=u64o8fZSPIA#VideoObject_publisher_logo_ImageObject"}},"potentialAction":{"@type":"SeekToAction","@id":"https:\/\/www.youtube.com\/watch?v=u64o8fZSPIA#VideoObject_potentialAction","target":"https:\/\/www.youtube.com\/watch?v=u64o8fZSPIA&t={seek_to_second_number}","startOffset-input":"required name=seek_to_second_number"},"interactionStatistic":[[{"@type":"InteractionCounter","@id":"https:\/\/www.youtube.com\/watch?v=u64o8fZSPIA#VideoObject_interactionStatistic_WatchAction","interactionType":{"@type":"WatchAction"},"userInteractionCount":28526}],{"@type":"InteractionCounter","@id":"https:\/\/www.youtube.com\/watch?v=u64o8fZSPIA#VideoObject_interactionStatistic_LikeAction","interactionType":{"@type":"LikeAction"},"userInteractionCount":630}]}],"about":["Tax Relief"],"wordCount":4453,"articleBody":"Tax debt relief is a term used to describe the various programs and methods that taxpayers and tax professionals utilize in order to reduce a taxpayer’s tax debt with the IRS or state revenue agency or at least get more time for the taxpayer to pay their tax debt.Here are the eight primary ways to get tax debt relief:Offer in CompromiseCurrently Not Collectible StatusPenalty AbatementInnocent Spouse ReliefPartial-Payment Installment AgreementFull-Payment Installment AgreementBankruptcyContesting the LiabilityOur Pick For Best Tax Relief Company\t\t\t\t\t\t\t\t\t\t\t\t\t\t.st5-50967.btn.btn-default:hover{border-color: #4db848;color: #4db848;background: #fff !important;}\t\t\t\t\t\tLearn More\t\t\t\t\t\t\tBBB Accredited: A+ Rating With 5\/5 RatingGuarantee: 30-Day Moneyback GuaranteeReasonable Fees: Lower than Industry AveragesTax Attorneys and CPAs: Decades of Combined Experience\tTable of ContentsToggle1. Offer in Compromise2. Currently Not Collectible (CNC) Status3. Partial-Payment Installment Agreement (PPIA)4. Full-Payment Installment Agreement5. Penalty Abatement6. Innocent Spouse Relief7. Bankruptcy8. Contesting the LiabilityTax Debt Relief FAQs1. Offer in CompromiseAn offer in compromise is an agreement with the IRS or your state to pay less than you owe on your tax debt with any excess debt being written off.How Does an Offer in Compromise Work?And the beauty of it that it doesn’t matter so much what you owe; it matters what you can pay based on the IRS’s math.So even if you owe the IRS $1,000,000, if we can show the IRS that by their own math \u2014 by their own methodologies laid out in the Internal Revenue Manual for calculating how much equity you have in assets and what your monthly expenses are \u2014 your reasonable collection potential is only $100, the IRS should accept that $100 as your offer in compromise and write off the remaining $999,900.This sounds great, right?That’s because it is \u2014 offers in compromise are, essentially, the “holy grail” of tax debt relief options.Offer in Compromise Acceptance RateThe bad news, however, is that the IRS rejects the majority of offers in compromise it receives \u2014 56% to be exact.And of the offers it accepts, many are not only for $100 \u2014 it’s not uncommon for accepted offers in compromise to be for some higher amount; it all depends on the financial analysis.And while the states don’t publish their offer in compromise acceptance and rejection rates, in my experience, I would estimate the offer in compromise rejection rate at the state level to be even higher than that 56% figure at the IRS level.How to Maximize Your Offer in Compromise ChancesBut there are some things you can do to maximize your chances of getting your offer in compromise approved, including making sure that you:Actually qualify for the type of offer in compromise you are submittingHave filed all required tax returns for the past six yearsCorrectly complete all required forms correctly such as the Form 656 and the Form 433-A (OIC)Include the correct documentation and payments with your offer in compromiseMail your offer to the right placeFor more information about maximizing your chances of getting your offer in compromise approved, check out the video below.2. Currently Not Collectible (CNC) StatusCurrently not collectible (CNC) status is a special hardship status with the IRS that allows you to owe the IRS but not have to pay off your debt as long as you remain in CNC status.That’s right \u2014 no payments.The Best Thing About CNC StatusAnd probably the best part about CNC status is that while you are in this special status, the IRS’s 10-year clock that it has to collect your debt that begins on the date your tax is assessed keeps ticking.So theoretically, if you are able to remain in CNC status throughout that entire 10-year period \u2014 and keep in mind that that 10-year period can be extended for other things like bankruptcy or submitting an offer in compromise or an installment agreement request \u2014 then your tax debt will simply drop off without you paying the government a dime.How to Get CNC StatusBefore you get too excited, however, understand that eligibility for CNC status can be quite difficult to get; you basically have to show the IRS that you have no disposable income by the IRS’s math using the IRS standards and have no or almost no accessible equity in assets.So for example, if you have equity in your home, the IRS will often ask for loan denial letters from lenders to show that you can’t access the equity in your home.\u00a0 Now, if you otherwise qualify for CNC status, meaning that you have no disposable income, most mortgage lenders would deny you for a loan to take cash out of your home anyway.Does CNC Status Protect You From Liens?Another thing to know about CNC status is that it does not lien proof you; the government may still file a Notice of Federal Tax Lien against you in state and county records to protect its interests informing other creditors of the IRS’s claim such that if you were to, say, sell a property you own, the IRS would be paid the lien amount before you get any of the proceeds.Many clients are disappointed when I tell them this, but if you think about it, this makes sense.\u00a0 If the government is letting you not pay your tax debt right now while you’re in CNC status, it stands to reason that it would want to protect its interests if you were to, say, sell a property and have hundreds of thousands of dollars wired to your bank account from escrow.If you can show hardship, the government is willing to lend you a break from payments, but if you get some massive windfall like that, you’re going to have to pay the piper if in fact a Notice of Federal Tax Lien was filed against you.You Can Get Kicked Out of CNC StatusAnd I want to stress this point \u2014 as great as CNC status can be, it does not provide the finality that an offer in compromise provides unless you remain in CNC status until the IRS’s time limit to collect your debt expires.And this is easier said than done because the IRS can remove you from CNC status if it believes that your financial circumstances have changed \u2014 for example, if you file a tax return indicating that you’re making a lot more money now than you were when you entered into CNC status.Now, you can be placed back into CNC status in this circumstance \u2014 maybe your income went up but your allowable expenses went up as well \u2014 but you would have to submit a new set of financials to the IRS and basically go through that process all over again.For more information about CNC status, check out the video below.3. Partial-Payment Installment Agreement (PPIA)A partial-payment installment agreement (PPIA) is an agreement with the IRS to pay them less than you owe in an installment agreement.You see, sometimes clients we work with don’t qualify for an offer in compromise because perhaps they have too much equity in their home or other assets nor do they qualify for CNC status because they have some disposable income every month that precludes them from being deemed noncollectible by the IRS.But here’s the deal.\u00a0 As long as you can show \u2014 similar to CNC status \u2014 that you don’t have any accessible equity in assets, the only thing the IRS can ask you to pay is the amount of your monthly disposable income calculated according to the IRS’s own methodology for calculating monthly disposable income.PPIA ExampleSo let’s say you owe the IRS $100,000 for tax year 2015.\u00a0 Oftentimes our clients owe for multiple tax years, but just for the sake of example, let’s make it easy and say that a taxpayer owes $100,000 for tax year 2015.And let’s say the assessment date for this debt was some time in October 2016 shortly after they filed their tax return that was on extension.\u00a0 So the IRS has 10 years \u2014 so until October 2026 \u2014 to collect this $100,000 debt.\u00a0 And yes, there’s penalties and interest and all that, but we’re going to ignore that just for sake of an easy example here.So let’s say the current date \u2014 to make things easy \u2014 is in October 2023 and the IRS’s 10-year statute to collect has not been extended so the IRS’s deadline to collect is still in October 2026.October 2026 is three years from October 2023 \u2014 36 months to be exact.So let’s say that we make a case to the IRS that based on the IRS’s own methodologies a client has no accessible equity in assets and only has a disposable income of $500 per month.In this case, we’d get the client in an installment agreement of that $500 per month.\u00a0 And how long would they be paying $500 per month?\u00a0 They would be paying $500 per month only for the next 36 months because that’s when their tax debt drops off.So what’s $500 times 36?\u00a0 It’s $18,000.\u00a0 That’s not a bad deal on a $100,000 tax debt.And that’s why this is called a partial-payment installment agreement because it’s only going to partially pay off the balance in an installment agreement.And if we can argue that the taxpayer has even less disposable income \u2014 which could very well be possible \u2014 to the tune of only $100 per month, they’d only end up paying the IRS $100 times 36 or $3,600 on their $100,000 tax debt \u2014 an even better deal on a PPIA.Does a PPIA Protect You From Liens?Now, similar to CNC status, a PPIA does not lien proof you; the IRS may still file a Notice of Federal Tax Lien against you.The IRS Can Review Your PPIA Every Two YearsAlso, the IRS has the right to review PPIAs every two years \u2014 and in fact this is not mere IRS policy; this is statutory; it is federal law.\u00a0 Internal Revenue Code Section 6159(d) says, “In the case of an agreement entered into by the Secretary [meaning the Secretary of the Treasury and by extension the IRS] under subsection (a) for partial collection of a tax liability [that’s a partial-payment installment agreement], the Secretary shall review the agreement at least once every 2 years.”So if you’re making more money when the IRS reviews your PPIA, they may want to revisit it and potentially move you to a full-payment IA, which I’ll discuss next.So that’s how partial payment installment agreements work.And you’ll notice a theme with all of these options is that what you qualify for really depends on what your financials look like.And I’m not talking about your actual financials and cash flow \u2014 I’m talking about your financials as calculated by IRS methodologies and standards using forms like the 433-A, the 433-F, the 433-A (OIC) for an offer in compromise, etc.4. Full-Payment Installment AgreementA full-payment installment agreement is an agreement with the IRS to pay off your entire tax debt.So while this kind of payment arrangement does not result in a reduction of your balance, it does give you more time to pay off your tax debt and avoid forced collection activities such as wage garnishments and bank levies.For obvious reasons, the IRS is generally much more open to this kind of tax debt relief option than the others I spoke about previously, and in some cases, we can get the IRS to avoid filing a Notice of Federal Tax Lien if a taxpayer agrees to a full-payment installment agreement over 72 months.With CNC status or a partial-payment installment agreement, there is no lien proofing option there.And quite frankly some people just are in too good a financial position to really qualify for anything other than a full-payment installment agreement.For more information about IRS installment agreements, check out the video below.5. Penalty AbatementIf you owe the IRS money, they will charge you penalties as a result.Common IRS PenaltiesThe most common IRS penalty is the failure-to-pay penalty, which the IRS charges at 0.5% of your unpaid balance every month or part of a month with a maximum penalty of 25% of your balance.The failure-to-file penalty is another common IRS penalty.\u00a0 This penalty is equal to 5% of your unpaid balance for every month or part of a month that your tax return is late with a maximum penalty of 25% of your balance.Now, if you are unlucky enough to be subject to both the failure-to-pay penalty and the failure-to-file penalty, the failure-to-file penalty is reduced by the failure-to-pay penalty for the five months during which the failure-to-file penalty kicks in.So because of that, the maximum combined failure-to-file penalty and failure-to-file penalty amount you can be hit with is 47.5% of your balance.There are many other penalties as well that the IRS can accrue and assess, but these are the major ones.How to Get Your IRS Penalties ForgivenThe good news, though, is that you can get some abatement \u2014 that is, forgiveness \u2014 of your tax penalties.If you’ve been a good taxpayer historically and just got behind for a year or something like that, we can generally get the IRS to waive these penalties.But if you have a pretty spotty compliance history recently, we’d need to make a case based on reasonable cause for why the IRS should remove your penalties for that year or those years.And it’s not as easy as saying, “Oh, I was sick, and that’s why I couldn’t file my taxes,” or, “Oh, a close relative passed away, and that’s why I couldn’t pay.”There has to be a strong link between the life circumstance or whatever it is that you are claiming as your reasonable cause and your lack of compliance.\u00a0 You have to spell everything out and connect the dots for the IRS in a logical way, or they will not grant penalty abatement for reasonable cause.They will also consider other factors.\u00a0 For example, if you’re claiming that an illness prevented you from filing your taxes, they may say, “Well, look \u2014 you were able to take care of other obligations when you were sick such as your business obligations or your employment obligations.\u00a0 Why didn’t your illness hinder you from taking care of these things but it did hinder you from taking care of your taxes?”That’s the mentality the IRS has when it comes to penalties.\u00a0 That said, I do recommend at least looking into penalty abatement for yourself as a form of tax debt relief.6. Innocent Spouse ReliefInnocent spouse relief is a form of tax debt relief where your spouse or ex-spouse made some mistakes on a married filing jointly tax return that you were on as well.Examples of these mistakes could be underreporting income or taking tax deductions or credits they shouldn’t have.Joint and Several LiabilityNow, because that was a married filing jointly return you filed with your spouse, you’re generally on the hook just as much as your spouse is for that tax debt.It doesn’t matter if he or she earned all the income and he or she was the one who actually filled out the return \u2014 by signing that married filing jointly return as the spouse, you are affirming under penalty of perjury \u2014 to quote the language on the Form 1040 itself \u2014 that you have “examined [the] return and accompanying schedules and statements and to the best of [your] knowledge and belief, they are true, correct, and complete.”And both of you \u2014 you and your spouse or ex-spouse for that tax year \u2014 are just as liable as the other for the tax debt for that year; that is called joint and several liability.So that’s the general rule.How Innocent Spouse Relief WorksBut if you qualify for and obtain innocent spouse relief, you are not on the hook for the taxes, penalties, and interest attributable to your spouse’s or ex-spouse’s shenanigans.Now, to get innocent spouse relief, the burden is on you to show that you did not know and had no reason to know that the tax return that you signed was incorrect leading to the tax balance\u00a0and that it would be unfair for you to have to pay these back taxes.\u00a0 They also consider things like whether or not your spouse or ex-spouse abandoned you as well as if you personally received a “significant benefit” from the error on the return.So there are hoops to jump through; ignorance of what your spouse or ex-spouse did is necessary but not sufficient \u2014 yes, you had to be ignorant of what your spouse or ex-spouse did, but it’s not enough to make an innocent spouse claim on that basis alone; you must also have had no reason to know that they were being shady and that holding you liable would be unfair.\u00a0 And like I mentioned, there are other things the IRS looks at as well when evaluating innocent spouse claims.There’s a lot of facts and circumstances involved here to make an innocent spouse claim, but the general rule is that the more distance between you and whatever errors or misstatements your spouse or ex-spouse made on your and their tax return, the better.Good Fact Pattern for Innocent Spouse ReliefA good example of an innocent spouse claim is where your spouse runs a business that you are not involved in whatsoever because you have your own business or employment or you are providing childcare to your children while your spouse is working on their business and while you know that they incur a lot of travel expenses for their business you don’t really know exactly how much.So if in reality they only had $50,000 of justifiable travel expenses during the year but they reported $75,000 of travel expenses during the year and the IRS caught this in an audit, you may have grounds to claim that you had no reason to know exactly how much your spouse spent on travel for their business.Bad Fact Pattern for Innocent Spouse ReliefBut if the return had an extremely obvious error in it \u2014 for example, if your tax return indicated a deduction or credit for tuition expenses but you know that neither you nor your spouse nor any of your dependents are going to college right now \u2014 that’s not a very good fact pattern.The more obvious the error and the easier it is to catch and the simpler it is to understand, the weaker your claim.But innocent spouse relief can be an excellent way to get tax debt relief in the right circumstances because it results in all that tax debt attributable to one’s spouse’s or ex-spouse’s errors on a joint tax return being removed from your account with the IRS.Just as a pointer there \u2014 always review your tax returns and don’t just blindly trust your spouse with financial and tax matters.7. BankruptcyBankruptcy is a legal process through which debtors can obtain relief from their debt, tax debt or otherwise.Now, there are definitely some drawbacks to filing for bankruptcy, but if you have significant unsecured non-tax debt such as medical debt or credit card debt in addition to your tax debt, bankruptcy could make sense for you.Now one thing to know about taxes and bankruptcy is that generally only income taxes are something that can be discharged in bankruptcy.\u00a0 So if you run a business and you withheld FICA taxes from your employee’s paychecks that you did not remit to the government \u2014 those trust fund taxes are not dischargeable in bankruptcy.So I’m talking about personal income taxes here.And when we’re talking about discharging or reorganizing personal income tax debt in bankruptcy we’re typically talking about Chapter 7 or Chapter 13 bankruptcy.There are other kinds of bankruptcy filings available to individual debtors, but by far Chapter 7 and Chapter 13 are the most common.Chapter 7 (Liquidation)In a Chapter 7 bankruptcy, the bankruptcy trustee will liquidate your assets except for certain exempt assets that are protected from liquidation and use the proceeds of these assets to pay off your debts that qualify for discharge in bankruptcy.Now, not all tax debts are dischargeable in a Chapter 7.\u00a0 In order for your individual income tax debt to be discharged in a Chapter 7, you and your debt must meet these requirements:The tax must have been due at least three years before you file for Chapter 7.\u00a0 The due date for these purposes include extensions.You must have filed the tax return for the tax debt in question at least two years before you file for Chapter 7.The tax must have been assessed at least 240 days before you file for Chapter 7.Taxpayers often owe tax debt for multiple years, so a taxpayer’s tax debt for years that meet these requirements may be dischargeable in Chapter 7, while a taxpayer’s tax debt for years that don’t meet these requirements wouldn’t.Note that if a notice of tax lien has been filed against you, and you retain the property in bankruptcy \u2014 which can happen if the bankruptcy trustee believes that selling the property would not result in any proceeds to pay off other creditors \u2014 the tax lien will survive your Chapter 7 bankruptcy.Chapter 13 (Reorganization)In a Chapter 13 bankruptcy, your debts are reorganized to allow you to pay them off in a three-to-five-year payment plan.\u00a0 And whether your plan is three years or five years depends largely on your income.In a Chapter 13, your tax debt is categorized as either secured or unsecured and then your unsecured tax debt is categorized as either priority or nonpriority.Secured Tax Debt in Chapter 13So with respect to a tax debt, if a notice of tax lien has been filed against the taxpayer, the tax debt contained in that lien is considered to be secured, and you will have to pay it off in full in your three-to-five-year repayment plan.Now, keep in mind that the IRS isn’t continually filing Notices of Federal Tax Lien, so it’s possible that you may have a lien against you for older tax debt but not some newer tax debt.So the secured tax debt must be paid in full in the repayment plan.Unsecured Tax Debt in Chapter 13What about the unsecured tax debt \u2014 tax debt for which no notice of tax lien has been filed?Unsecured tax debt is categorized into either priority or nonpriority debt.And if a tax debt for a particular year is categorized as priority, you will have to pay it off in full in the three-to-five-year payment plan that’s arranged through the bankruptcy.But any of your tax debt that is classified as nonpriority is paid out of your remaining discretionary monthly income, which all your other creditors get a piece of as well.\u00a0 So it’s possible that you may not have to pay all of your nonpriority tax debt in the payment plan.So this distinction between priority tax debt and nonpriority tax debt is very important.So what makes a personal income tax debt nonpriority?\u00a0 Well, the rules are similar to the rules for the kind of personal income tax debt that would be discharged in a Chapter 7 bankruptcy.\u00a0 Here are the requirements for a personal income tax debt to be considered nonpriority in a Chapter 13 bankruptcy:The tax must have been due at least three years before you file for Chapter 13.\u00a0 The due date for these purposes include extensions.You must have filed the tax return for the tax debt in question at least two years before you file for Chapter 13.The tax must have been assessed at least 240 days before you file for Chapter 13.These are the basic rules concerning the discharge and reorganization of tax debt in bankruptcy.\u00a0 Obviously bankruptcy is a significant decision, and you have to qualify for it as well.8. Contesting the LiabilityNow, there are instances where you can get tax debt relief simply by proving to the IRS that you don’t actually owe the debt or at least that you do not owe all of it.There are a few ways to go about this.\u00a0 One way is to amend your tax return for the year in question if your originally filed tax return was erroneous and that error (or those errors) on your original return gave rise to your tax debt or a portion of it.To submit an amended return, you simply prepare your return over again with any corrections you’re making so this time it’s accurate and you send that to the IRS with Form 1040X and a copy of your original return as well.Of course, if you’re looking to get a refund or a credit for a particular tax year, you only have three years from the date you filed your return \u2014 and if you filed it before the original due date the IRS generally considers you to have filed it on the original due date \u2014 to get a refund or credit for that year.But if you paid tax on a return later than that date, you actually have two years from the date you paid tax to get that tax refunded with an amended return.Another way to contest your liability with the IRS is to file a doubt as to liability offer in compromise.You file this kind of offer in compromise using Form 656-L and in Section 5 of this form you must explain why you believe the amount of tax you’re contesting is incorrect.\u00a0 You should also attach any documentation supporting your explanation to the Form 656-L as well.Tax Debt Relief FAQsHere are some commonly asked questions about tax debt relief.Can I get state tax debt relief?Yes, you can get state tax debt relief.Now, just to be clear, in this article, I covered the federal (IRS) forms of tax debt relief for money owed to the IRS.If you owe your state, your state probably has similar tax relief options \u2014 though not necessarily all the ones offered at the federal level \u2014 and even if, for example, your state does have an offer in compromise program, it will likely have different rules and procedures than the federal offer in compromise program.But the similarities should be greater than the differences, and by giving you an overview of the federal tax debt relief programs, it should give you some context for your state tax debt as well.\u00a0\u00a0"},{"@context":"https:\/\/schema.org\/","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"name":"Taxes","item":"https:\/\/moneydoneright.com\/taxes\/#breadcrumbitem"},{"@type":"ListItem","position":2,"name":"Tax Relief","item":"https:\/\/moneydoneright.com\/taxes\/\/tax-relief\/#breadcrumbitem"},{"@type":"ListItem","position":3,"name":"8 Ways to Get Tax Debt Relief","item":"https:\/\/moneydoneright.com\/taxes\/tax-relief\/tax-debt-relief\/#breadcrumbitem"}]}]