What tax debt relief means
“Tax debt relief” is a broad term for options that can help you manage, settle, or temporarily delay collection of federal tax debt. You can pursue IRS programs yourself or pay a tax professional or company to help you evaluate and apply for them.
Before paying for help, compare the service being offered with the options available directly through the IRS.
Tax debt relief options through the IRS
The IRS provides several options for taxpayers who can’t pay in full:
- Installment agreement: Pay your balance off in monthly payments. Most individuals who owe $50,000 or less can apply online at no or low cost.
- Offer in Compromise (OIC): Settle your tax debt for less than the full amount owed, if the IRS agrees that the offer is the most it can reasonably expect to collect. This option requires a $205 application fee (waived for low-income taxpayers) and completion of Form 656/Form 433-A. Before applying, you can check your eligibility with the IRS OIC program’s pre-qualifier tool.
- Currently-not-collectible status: If paying anything would leave you unable to cover basic living expenses, the IRS can temporarily pause collection efforts until your finances improve.
- Penalty abatement: The IRS may waive penalties (though not the underlying tax) for a first-time slip-up or a documented reasonable cause. Beginning in August 2026, the IRS is changing from First-time abatement to Automatic Exemption for Penalty (AEP), which will be used going forward.
- Automatic Exemption for Penalty (AEP): Replacing penalty abatement, the IRS will now automatically forgo penalties for failure to file, failure to pay, or failure to make a deposit if you’ve been compliant for the last three years.
Red flags of a tax relief scam
Some tax relief companies provide legitimate services, but be cautious of:
- Guaranteed reductions before your finances have been reviewed
- Unexpected calls claiming to be from the IRS or another government agency
- Claims about special IRS programs that aren’t publicly available
- Pressure to provide personal information or make an immediate payment
- Vague explanations of what you’re paying for or what happens if the company can’t reduce your debt
Getting professional help with tax debt
You may be able to handle a straightforward payment plan or other IRS request yourself. More complicated tax problems may benefit from help from a:
- Certified public accountant
- Enrolled agent
- Tax attorney
You may also qualify for help from:
- Low Income Taxpayer Clinic. LITCs are independent organizations that provide free or low-cost help to qualifying taxpayers with IRS disputes.
- Taxpayer Advocate Service: The Taxpayer Advocate Service (TAS) is an independent organization within the IRS that provides free tax debt assistance, like direct communication with the IRS on your behalf, with no income limits.
If you’re already behind on taxes:
- File any required returns.
- Review your IRS payment and relief options.
- Consider setting up an IRS installment agreement before paying a company for help.
Note: The Collection Statute Expiration Date (CSED), the end of the tax debt collection period, is typically 10 years.
