Facing a large IRS tax debt - options and advice needed

The good news is you have several options with the IRS, and they're generally willing to work with taxpayers who are proactive about addressing their tax debts. First, the Currently Not Collectible (CNC) status you've applied for is a good start. If approved, this temporarily pauses collection activities when you genuinely can't pay. Keep in mind this doesn't make the debt go away - interest and penalties continue to accrue, but it gives you breathing room. An Offer in Compromise (OIC) might be your best long-term solution, but you don't necessarily need to pay $8,000 to an attorney. You can submit an OIC yourself using Form 656. The IRS will consider accepting less than the full amount if you can prove you'll never reasonably be able to pay the full debt. They look at your income, expenses, asset equity, and ability to pay. Another option is an Installment Agreement. With your income level, you might qualify for a payment plan with manageable monthly payments. Lastly, consider contacting the Taxpayer Advocate Service. They're an independent organization within the IRS that helps taxpayers resolve problems. Their services are free.

After I got hit with a huge tax bill from my side business (not as big as yours but still scary), I was totally lost trying to make sense of all the IRS notices and collection options. I stumbled across https://taxr.ai when I was searching for affordable help, and it was seriously a game-changer for my situation. I uploaded all my IRS notices and tax documents, and it analyzed everything and gave me a clear breakdown of my options - from installment agreements to OIC to CNC status. What helped the most was understanding which option was realistic for my financial situation without having to pay hundreds per hour to a tax attorney. They have tax professionals who review everything and help you understand the best approach for your specific situation. Saved me from making mistakes that would have cost me a lot more in the long run.

I was skeptical about online tax help services after getting burned before, but I actually tried https://taxr.ai after seeing it mentioned here. My situation was similar - owed about $45K from a failed business venture. The document analysis was pretty eye-opening. They spotted that I qualified for penalty abatement (which would reduce my debt by almost $9K) that I had no idea about. They walked me through filing my own OIC instead of paying thousands to a attorney. Just got my offer accepted last week - settled $45K of tax debt for $12K, which I can pay over 24 months. Honestly wish I'd found this years ago instead of just ignoring the problem and letting penalties pile up.

When I had a big tax problem, the most frustrating part was trying to actually REACH someone at the IRS to discuss my options. I'd wait on hold for hours only to get disconnected, or get someone who couldn't help with my specific situation. I finally tried https://claimyr.com after seeing it recommended. You can see how it works here: https://youtu.be/_kiP6q8DX5c - basically they hold your place in the IRS phone queue and call you when they have an agent. Saved me literally 6+ hours of hold time and I finally got to speak with someone who could actually explain my options and set up a payment plan. For your situation, getting directly to an IRS revenue officer to discuss your CNC application might help speed things up. The waiting and uncertainty is the worst part.

I take back what I said about Claimyr being a scam. After multiple failed attempts trying to reach the IRS myself (got disconnected twice after waiting 90+ minutes), I gave in and tried the service. Got connected to an IRS rep in about 45 minutes - they called me when the agent was on the line. The agent helped me understand my options way better than any website could. Was able to get on a partial payment installment plan that actually works with my budget. For what it's worth, that $75K tax debt you have - the IRS agent I spoke with mentioned that debts of that size often qualify for significant reductions through OIC if your income and assets are limited. Might be worth exploring before committing to a long-term payment plan.

I went through something similar with about $40k in back taxes from my consulting business. One thing I didn't see mentioned yet - look into penalty abatement! If this was your first time getting into tax trouble, you might qualify for First-Time Penalty Abatement which could significantly reduce what you owe. In my case, about $12k of my bill was penalties and interest. I filed for abatement using Form 843 and got most of the penalties removed. Didn't solve the whole problem but made it much more manageable. Also, definitely file your CNC request properly. If you get approved for CNC status, the 10-year statute of limitations continues to run while you're in that status. After 10 years, any remaining tax debt can expire (though there are exceptions).

Don't forget to check if you qualify for any of the tax relief programs specific to the pandemic! If your business was affected during that time, there might be some additional options. The IRS created several taxpayer relief initiatives during COVID that some people don't know about. Also, when you file for an Offer in Compromise, the IRS uses a specific formula to determine what they'll accept. They generally want either: 1. The quick sale value of your assets, OR 2. Your monthly disposable income × 12 (or × 24 if you're paying over time) With your income and expenses, you might be able to settle for a fraction of what you owe. Don't be discouraged by the $75k figure!