Taxes are already complicated, and things can get messy if you get behind on paying them. When taxes are delinquent or overdue — typically from previous years — they are referred to as “back taxes.” And if you owe them, then utilize these various tax relief programs.

5. Offers-In-Compromise

The IRS’s offers-in-compromise program is one of the most popular tax forgiveness programs. Under this program, you can settle your tax debt for less than you owe. People owing less than $250,000 are now permitted to set up installment plans without the need for prior authorization or additional income verification. The IRS also facilitates an Online Payment Agreement where taxpayers with Direct Debit Installment Agreements are permitted to request lower monthly payment amounts and different recurring due dates.

To be eligible for this program, you must:

  • Prove that you cannot pay your taxes in full
  • Demonstrate that paying your taxes would create a financial hardship
  • Have filed all required tax returns

This lets you settle your back taxes with the IRS for less than you owe. According to the IRS, it may be an option if you absolutely can’t pay your tax debt or if doing so creates a financial hardship.

The IRS also facilitates an Online Payment Agreement where taxpayers with Direct Debit Installment Agreements are permitted to request lower monthly payment amounts and different recurring due dates.

If you meet these requirements, you can submit an offer in compromise to the IRS. The IRS will review your offer and determine if it is acceptable.