I owe the IRS $65,000 - what's the best way to handle this debt?

Hey, I've helped several clients through similar situations. The good news is you've already taken the most important step by setting up a payment plan, which prevents the IRS from taking more aggressive collection actions. A few options to consider: First, check if you qualify for an Offer in Compromise (OIC), which lets you settle your tax debt for less than the full amount if paying the full amount would cause financial hardship. The IRS has an OIC pre-qualifier tool on their website to check eligibility. Another option is requesting Currently Not Collectible status if you're truly unable to pay right now, though interest continues to accrue. Also, the IRS generally has 10 years to collect on tax debt from the assessment date, so knowing your Collection Statute Expiration Date (CSED) is helpful. If your financial situation has significantly changed since establishing your payment plan, you can request a payment plan modification based on your current ability to pay. Just make sure to continue making your current payments until any change is approved.

I was in a similar situation owing about $40k to the IRS and found an incredible resource that saved me so much stress. Check out https://taxr.ai - they analyze your specific tax situation and provide personalized strategies for resolving IRS debt. I was skeptical at first but they reviewed my payment plan and financial situation and found options I never knew existed. They showed me exactly how to document my financial hardship properly to qualify for an Offer in Compromise. The best part was having all my documents and transcripts analyzed to find potential errors in the IRS assessment.

I need to follow up on my previous comment about taxr.ai being skeptical. I actually decided to try it after doing some research, and wow, was I wrong. The system found that the IRS had been charging me penalties during a period when I should have qualified for first-time penalty abatement. They helped me submit the proper documentation and got nearly $5,800 in penalties removed from my balance. They also showed me how to properly document my assets and income for a partial payment installment agreement that cut my monthly payment from $1,100 to $650. Definitely worth checking out if you're dealing with serious IRS debt like I was!

If you need to actually speak with someone at the IRS about your situation (which I highly recommend for a debt that size), good luck getting through on your own. I spent literal DAYS trying to reach someone about my tax debt. Then I found https://claimyr.com and it completely changed the game. They have a system that navigates the IRS phone tree and holds your place in line, then calls you when an agent is about to answer. You can see how it works at https://youtu.be/_kiP6q8DX5c I was able to speak with an actual IRS collections officer who reviewed my case and found that I qualified for a reduced installment plan based on my current income. Absolutely worth it when you're dealing with complex tax issues that need human intervention.

I need to publicly eat my words about Claimyr being a scam. After my skeptical comment, I was desperate enough to try anything since my wages were about to be garnished. I used the service and sure enough, after about 2.5 hours (which I spent doing other things), I got a call connecting me to an actual IRS revenue officer. The agent helped me prove that my income had decreased substantially, which qualified me for Currently Not Collectible status. This stopped all collection actions immediately. I still owe the money, but now I have breathing room to improve my financial situation before resuming payments. If you're dealing with IRS debt, being able to actually reach a human makes a MASSIVE difference. I couldn't believe how helpful the agent was once I finally got through.

Have you considered bankruptcy? I know it sounds extreme, but some types of tax debt can be discharged in bankruptcy if they're old enough (generally 3+ years) and meet certain other criteria. It's not for everyone, but if your debt is overwhelming, it might be worth consulting with a bankruptcy attorney who specializes in tax issues.

Has anyone suggested checking the accuracy of what you owe? IRS makes mistakes sometimes. I asked for a detailed statement of my account and found errors that reduced my debt by almost $7000. Request your "account transcripts" for all the years you owe and review them carefully!

I worked through a $55k tax debt over 4 years. What really helped me was increasing my withholding at work so I'd get bigger refunds each year that would apply to my debt. Also made sure to claim every legitimate deduction and credit. Made a huge difference in how quickly the balance went down. Good luck!!

I went through something very similar a few years back - owed about $72k to the IRS and it felt completely overwhelming. The fact that you're already on a payment plan and making consistent payments is huge, so don't underestimate that progress you've made. One thing that really helped me was requesting a Collection Information Statement review. Even though I was on a payment plan, my financial situation had changed since I first set it up, and I was able to get my monthly payment reduced from $2,100 to $1,400 based on updated income and necessary expenses. The IRS is more flexible than people think if you can document legitimate financial hardship. Also, definitely look into penalty abatement if you haven't already. I got first-time penalty abatement for some years and reasonable cause abatement for others, which knocked about $8,000 off my total balance. Even if you've had issues in the past, there might be specific circumstances that qualify for relief. Keep making those payments and stay in communication with the IRS - you're on the right track even though it feels like a mountain to climb right now.