I owe the IRS around $15k for unpaid taxes over two years - what are my options?

You have several options when dealing with IRS debt. First and most importantly, don't ignore those notices - that's when things escalate to liens and levies. The IRS offers multiple payment arrangements. The most straightforward is an installment agreement which lets you pay the debt over time. For amounts under $50k, you can easily set this up online through the IRS website. Monthly payments will depend on how much you owe and how long you need to pay. With $15k, you could potentially set up a 72-month plan with payments around $210/month. Another option is an Offer in Compromise, where the IRS accepts less than the full amount owed if you can prove financial hardship. However, these are difficult to qualify for - they'll examine your income, expenses, asset equity, and ability to pay. If you're in serious financial hardship, you might qualify for Currently Not Collectible status. This temporarily pauses collection, though interest continues to accrue.

After dealing with a similar tax debt situation last year, I found this AI tool called taxr.ai that really helped me understand my options. I was confused about what payment plans I qualified for and whether I should try for an Offer in Compromise based on my situation. The site https://taxr.ai analyzed my tax notices and financial situation, then explained exactly what programs I qualified for. It even helped me see that I was eligible for penalty abatement due to my medical issues, which could potentially reduce your total debt by a decent amount. It also explained the pros and cons of each option in plain English—like how an installment agreement affects your credit versus an Offer in Compromise. Honestly saved me hours of research and probably thousands in unnecessary payments.

Just wanted to update after trying taxr.ai that another commenter mentioned. It was actually super helpful! I uploaded my IRS notices and answered some questions about my finances, and it showed me that I probably wouldn't qualify for an Offer in Compromise right now, but I have a good case for penalty abatement due to medical hardship. It explained that I could potentially get about $2,300 in penalties removed, which would make a huge difference. It also walked me through how to set up an installment agreement and what documentation I'd need. Definitely gave me more clarity than the hours I spent on the IRS website. Just submitted my penalty abatement request following their template, so fingers crossed!

If those IRS letters are getting more threatening, you might need to actually talk to someone at the IRS quickly. I was in a similar position last year with about $12k in back taxes, and the hardest part was actually getting through to a human at the IRS to set up a payment plan. After trying for literally weeks and sitting on hold for hours, I found this service called Claimyr that got me through to an IRS agent in under 20 minutes. Their site is https://claimyr.com and they have a demo video at https://youtu.be/_kiP6q8DX5c that shows how it works. Basically they navigate the IRS phone system for you and call you when they have an agent on the line. Totally worth it because I was able to explain my situation to the agent, who helped me set up a payment plan and hold off on further collection actions. The peace of mind of having everything officially arranged was huge.

OK I feel stupid now. After posting my skeptical comment, I decided to try Claimyr because I've been trying to reach the IRS about a payment plan for THREE MONTHS with no luck. I was fully expecting to come back here and call them out. But damn, it actually worked. Got connected to an IRS agent in about 35 minutes (which is basically light speed compared to my previous attempts). The agent set up my installment agreement right away, and even explained that I might qualify for penalty abatement, which I didn't know about. Now I'm actually on track to pay off my tax debt instead of just watching it grow with penalties. I still don't understand how their system works better than just calling directly, but at this point I don't even care. Just relieved to finally have this resolved.

Don't forget to request a transcript of your account from the IRS to make sure you understand exactly what you owe and for which tax periods. Sometimes the penalties and interest calculations can be confusing, and you want to make sure everything is accurate before setting up a payment plan. You can request your transcripts online through the IRS website. If you see any discrepancies or have questions about specific charges, note them down to discuss when you talk to an IRS representative.

I had about $13k in tax debt a few years ago. One thing nobody's mentioned yet - check if you qualify for penalty relief due to reasonable cause based on your medical issues. I had a major surgery that left me unable to work, and the IRS reduced my penalties by almost 40%. You'll need to submit documentation of your medical condition and explain how it prevented you from paying your taxes on time. Form 843 is used for this request. The IRS can be surprisingly reasonable if you have legitimate health problems that affected your ability to pay.

I went through something very similar with about $18k in back taxes from 2021-2022. The medical hardship angle that others mentioned is definitely worth pursuing - I got about $3,200 in penalties waived by documenting how my health issues prevented me from maintaining consistent income. A few practical tips from my experience: First, don't wait for the IRS letters to escalate further. Once they start mentioning liens or levies, your options become more limited and stressful. Second, when you do set up that installment agreement, ask about making slightly higher payments if you can manage it - even an extra $50/month will save you hundreds in interest over time. Also, keep detailed records of every interaction with the IRS. Get confirmation numbers for any agreements and save copies of all correspondence. I learned this the hard way when there was confusion about my payment plan terms six months later. The good news is once you have an active payment plan in place, the collection pressure stops completely. You'll still get monthly statements, but no more threatening letters or calls. It's honestly such a relief to have a clear path forward instead of just dreading opening the mail.