What Is IRS Tax Debt Resolution & 5 Best Methods to Defeat the IRS

John Paul Schmidt
Expert Contributor
Last Updated:
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The first question people who find themselves in IRS tax debt should ask is “Can I get IRS tax resolution?” The short answer is this: there are IRS tax resolution programs to help people in tax debt reduce their amount owed or make their tax debt more manageable. There are many companies that offer services that claim to do this for you — some of them reputable and some of them less so. Our team at Solvable aims to give you the tools you need to figure out which of these companies you can trust.

If you’re looking for ways to reduce the burden of your IRS tax debt, there are tax resolution companies that can help you. If you want to know more about what these companies do to help you reduce or manage your tax debt and find out which of these companies have a proven track record of successfully helping their clients, this guide should interest you.

What do IRS Tax Resolution Services Do?

Tax resolution services employ many methods to help you with your tax debt. Reputable tax resolution companies are staffed by tax professionals that look at what your particular tax situation calls for and then use the tools at their disposal to improve your tax debt situation.

Here are some of the services a professional tax resolution service can provide to help you take control of your back taxes and outstanding tax debt:

Past Due Return Filing

IRS tax resolution companies can help you file your past due tax returns. Failing to file tax returns can put you in debt to the IRS, even if you don’t have tax debt. The IRS will charge fines and interest on taxes from returns you didn’t file in previous years. Tax resolution companies can help you gather the information you need to file those previous returns and send them off for you to make sure you’re up to date on your taxes. They may even be able to help you find refunds and tax breaks as they prepare the missing return.

What Is IRS Tax Debt Resolution & 5 Best Methods to Defeat the IRS

Tax returns are due whether or not you can pay the amount you owe. If you want to file them yourself, you can do so the same way you file current tax returns.

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IRS Fresh Start Program

A tax resolution service may take advantage of the IRS Fresh Start Program to your benefit if you are eligible. The Fresh Start Program was developed by the IRS to help people more easily manage their tax debt. The program includes three options for tax resolution and settlement: the IRS Offer in Compromise, installment agreements, and tax lien withdrawals. Here’s a breakdown of all three:

IRS Offer in Compromise

An  IRS Offer in Compromise  is the rarest of these three options, as the IRS only agrees to them in particular situations. That being said, if you’re eligible, it’s not impossible to have an Offer in Compromise accepted, and it’s worth pursuing.

In an Offer in Compromise, you or your tax resolution company reaches out to the IRS with an offer to reduce the amount you owe on your taxes. Since the IRS accepts offers in compromise less frequently, this is something you may want to consider having a tax professional file for you. If the IRS deems your offer reasonable, and you have successfully shown why you can’t pay off the full original amount, then your total tax debt is reduced to your offer amount.

The IRS has this program in place to help people who would experience significant financial hardship if they paid their full due amount. If you want to see if an OIC is a viable route for your situation, you can use Solvable’s Offer in Compromise Calculator to see if you’re eligible.

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IRS Installment Agreement

An IRS installment agreement sets up a payment system for you to pay your tax debt. Rather than pay the full amount due in one exchange, it allows you to pay it in installments, over an agreed amount of time.

There are pros and cons to this option. The biggest advantage of it is that it allows you to pay off your tax debt in smaller steps. This can be particularly beneficial to those who think they may be more financially stable after the original due date and thus better able to pay off their tax debt. The downside to this option is that the IRS may still charge penalties and interest on the amount due until it is entirely paid off.

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IRS Tax Lien Withdrawal

A federal tax lien is the IRS’ claim to your property to ensure they get some of the amount you owe on your back taxes. The IRS can issue liens on your bank accounts, home, and any other significant assets such as vehicles. Tax liens are meant as protection for the IRS in the event you don’t pay your taxes. The surest way to remove a tax lien is to pay your taxes in full.

However, the Fresh Start Program has a component that allows you to remove the tax liens without having to pay your taxes first, as long as you’re eligible. To be eligible for a tax lien withdrawal, you have to be compliant in your last three years of tax filings and current on your current tax payments. You may also have your liens withdrawn if you’ve entered into a direct debit installment agreement and meet a longer list of eligibility requirements.

This is a good tool to use if you believe a lien would inhibit your ability to pay off your tax debt and can show proof to the IRS that this is the case. A professional tax service can help you develop a case to apply for a tax lien withdrawal.

Currently Not Collectible

Filing for Currently Not Collectible status stops the IRS from attempting to collect on the amount of taxes you owe them. People who successfully file for this have shown the IRS that they are unable to pay their taxes without putting themselves in a detrimental financial situation. To file for Currently Not Collectible status, you must present your basic living expenses and your income. If your expenses — after factoring in tax debt payments — exceed your income, you may be eligible for Currently Not Collectible status.

Keep in mind that Currently Not Collectible status does not remove the tax debt — it just removes your obligation to pay them for the time being. You’ll still be required to pay them when you lose your Currently Not Collectible status. The IRS may also still put tax liens on your property and keep any future tax refunds until the amount you own is paid off.

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After a predetermined period of time set by an IRS agent, the IRS will review your Currently Not Collectible status to look for changes in your financial situation. If they deem you are now able to afford payments on your tax debt, you lose the status.

IRS Penalty Abatement

In short, an IRS penalty abatement is the reduction or removal of tax penalties. There is more than one way to acquire a penalty abatement, but two of the most common are Reasonable Cause and First Time Penalty Abatement.

Reasonable Cause

If you claim Reasonable Cause to the IRS, you’re claiming that you have a valid excuse or reason for being in tax debt. A successful claim of Reasonable Cause may result in a reduction of the taxes you owe to the IRS. There isn’t one successful way to claim Reasonable Cause, as the reasons you claim it are yours alone. This is where the assistance of a tax resolution service comes in handy because you’ll need to thoroughly prove your reasons for being in tax debt are significant enough to be considered.

Reasonable Cause can be claimed for a wide variety of situations, including serious medical issues, death, unforeseen circumstances, among other things. You will also have to show to the IRS that you made an effort to meet your tax obligations but were unable to because of your Reasonable Cause.

First-Time Penalty Abatement

A first-time penalty abatement is reserved for those who are usually current with their taxes but fall behind one year for one reason or another. Successfully filing for this type of abatement can remove failure to file, failure to deposit, and failure to pay penalties. To be eligible for it, you must have a good tax history for the past three years and currently be compliant with your taxes.

IRS Statute of Limitations

The IRS statute of limitations lays out how long the IRS has to assess taxes and collect on them. For our purposes, let’s focus on what the IRS statute of limitations allows on tax collection.

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The rule allows the IRS to collect on the tax debt you owe them for only up to 10 years. After that, the tax debt is considered lost, and you are not required to pay it. However, up until that point, you will still accrue interest and penalties on the amount you owe. In addition, the IRS will collect what they can through tax liens on your property.

This waiting game is generally only beneficial to those who don’t have substantial assets for the IRS to take or for those who are willing to lose their personal property to wait out their tax debt. However, you run the risk of criminal charges if you simply avoid paying your taxes. This route is only for people who are unable to pay their taxes for the entire 10 years.

How Can a Solvable-Reviewed IRS Tax Resolution Service Help?

The methods and tools above are many of the tactics a reputable tax resolution service will use to help you make your tax debt easier to manage. But how do you rifle through IRS tax relief companies to find one that follows through on what they offer?

Solvable reviews many popular tax resolution services in order to find the most reputable companies. We look for the quality of tax professionals on their staff, gather data on their successes or lack thereof, and many other factors to measure the worth of these tax resolution services. The tax debt relief services that make it through our reviewing process are some of the best in the country and are likely to bring you results as you navigate through your tax debt situation.

We do this to bring you an honest look at the services you may come across in your search for help with your tax debt. Researching tax resolution services and reading reviews from former customers can take hours. Unless you’re comfortable and familiar with the tools of tax resolution, you still may not find what you’re looking for. Make the process easier by visiting our reviews section, which shows you the best tax resolution companies at your disposal.

IRS Tax Resolution Services Near Me

Around 17% of federal taxes go unpaid every year, and in total, Americans owe the IRS around $114.2 billion in taxes. With these high numbers, hundreds of tax resolution services have opened their doors, each claiming to be able to reduce the amount of taxes you owe or make paying them more manageable.

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Depending on where you live, you may have a local tax resolution service right in your city. Though some of these companies are trustworthy and can follow through on their offerings, they might still lack one valuable resource: a large team of tax professionals.

One of the reasons we prefer national tax resolution companies is that they put extra eyes on your tax situation. The companies we review employ larger teams of some of the most knowledgeable and experienced tax professionals in the country. And since their reaches are wider, they can help more customers. More customers lead to more honest reviews about what the companies offer.

Though your local tax resolution service may be qualified, you may still have a difficult time getting a well-rounded opinion about whether or not they are a reputable company. For reviews and results you can count on, Solvable suggests that you seek out a larger, nationwide company to look at your financial situation and provide you with a plan customized for your needs.

Top 10 List of IRS Tax Resolution Services With Certified Specialists

After studying real reviews from real customers of national tax resolution services, Solvable has compiled lists of the best ones out there. Pay special attention to the Solvable rating we give each of the services we review. Our ratings are based upon real customer feedback and expert ratings of each service.

Here are 10 of the highest-rated services in the country:

1. Stop IRS Debt

One of our highest-rated tax resolution services is Stop IRS Debt. They have a Solvable score of 9.6 and an A+ rating from the Better Business Bureau. They’ve been open for business for 10 years, offering great services for those in tax debt. They offer a free consultation and refunds in extenuating circumstances.

Their on-staff tax attorneys, CPAs, and agents generally resolve cases in between six and eight months. The top outcomes of the cases they resolved were successfully filing for payment plans, Currently Not Collectible status, Offers in Compromise, partial pay agreements, and more.

2. Community Tax

Community Tax has received a Solvable score of 9.4 and a BBB rating of A+ for their quality of service. Their team of tax professionals operates in 48 states (excluding Maryland and North Dakota), and they have bilingual employees who can help Spanish and English speakers alike. They’ve worked with over 65,000 people to resolve $600 million in tax debt.

Community Tax’s average case length is four months, and they also offer a free consultation to give you an idea of what they can do for you before you sign up for their services.

3.  J. David Tax Law

J. David Tax Law is a team of tax attorneys who have gained a Solvable score of 9.2. They don’t have a minimum tax debt requirement that you might see with other tax law firms.

This tax resolution service offers a free consultation before you sign up for their services. They specialize in payroll taxes and wage garnishments and resolve their cases in an average of six months.

“J. David Tax Law is simply the best. I found them on here to help me navigate through a complex IRS situation with a lien and a levy.” — Karen F., Five-Star Reviewer

4. Hurricane Tax

Hurricane Tax serves every state but Colorado, Oregon, and New Mexico and has an 8.6 Solvable rating. They’re fairly new to the tax resolution world with three years in business, but they have already helped over 1,300 people resolve over $36 million in tax debt in 2018. Their team is made up of tax attorneys, enrolled agents, and CPAs who help people gain Offers in Compromise, Currently Not Collectible status, partial pay installments, and more.

Hurricane Tax specializes in releasing people from tax levies and liens, and they form specialized plans for your case, starting with a free consultation.

5. Honest Tax

With over 14 years of experience, Honest Tax has largely stayed true to their motto: “Honest Answers. Honest Results.” This service has an 8.4 Solvable rating for their work in every state. They do not service the state of Colorado. If you’re looking for a service that specializes in small business taxes, Honest Tax is a great resource.

Like the above services, they offer a free consultation where you’ll present your situation. Should you choose to move forward with Honest Tax, you have a 10-day refund window if you aren’t happy with their plan.

“Where do I begin… I owed a lot of money to both state and Fed and admittedly I was not the nicest to work with. Overall I was impressed with the integrity and higher ground this company took with me. They were always polite and moved my case along smoothly till the end. Impressed and glad I stuck it through.” Lino R., Five-Star Reviewer

6. Tax Law Advocates

With an 8.2 Solvable score, Tax Law Advocates is another service worth researching. Their team of enrolled agents, CPAs, and tax attorneys are experts in stopping tax levies, audit representation, and releasing wage garnishments.

Tax Law Advocates is based in Santa Ana, California, but their reach spreads far past the state. They have helped people from all over the country communicate with the IRS to relieve some of the pressures of their tax debt.

7. Alleviate Tax

Alleviate Tax has an 8.2 Solvable rating and is one of the newest services on this list. Though they have only been in business for two years, they have already helped 1,000 people to resolve $6 million in debt in 2018.

Alleviate Tax’s average case length is three months, and their staff mainly comprises tax attorneys and enrolled agents. One of their biggest draws is they offer flat rate pricing, rather than the hourly rates many other services charge. They also focus exclusively on resolving tax debt.

8. Optima Tax Relief

Optima Tax Relief is a nationwide tax resolution service that has earned a Solvable score of 8.0 and a BBB rating of A+. They serve all 50 states and taxpayers who are living abroad. After your free consultation, you have a 15-day money-back satisfaction guarantee if you decide to not move forward with their services.

9. Enterprise Consultants Group

The Enterprise Consultants Group has an 8.0 Solvable score and an A+ BBB rating. They specialize in California tax issues, especially for businesses. If you’re looking for a resolution firm to represent you during an audit defense, bankruptcy court, or a criminal tax case, Enterprise is a great option for you or your business.

10. Coast One Financial Group

Coast One Financial Group’s work with customers all around the nation has earned them a 7.6 Solvable rating. They offer free consultation services to all 50 states, 24 hours a day. The great customer reviews their clients have left them show Coast One’s focus on excellent service. Whether you’re looking for help with federal or state taxes, their team of CPAs, enrolled agents, and tax attorneys are there to help you.

See More >> This Guy Resolved His $8,597 Tax Debt - Learn His Methods!

Solvable strives to give you the information you need to take control over your IRS tax debt by providing you with the resources you need. So whether you’re looking for more information about tax debt in general or you want to find a tax resolution company to go to bat for you, you’ll find everything you need at Solvable.

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John Paul Schmidt
Expert Contributor
Last Updated: