In serious debt with the IRS - I owe $23k, what are my options now?

First, take a deep breath. A $23k tax debt is definitely serious, but it's not the end of the world and the IRS has procedures in place for exactly this situation. Your best option is going to be an Installment Agreement with the IRS. For debts under $50,000, you can usually get approved online without much hassle. The standard term is 72 months (6 years), which would put your monthly payment around $320-350 plus some interest and penalties. The interest rate changes quarterly but is generally reasonable compared to credit cards. Another option to consider is an Offer in Compromise, where you settle for less than the full amount. However, with your income level ($85k), you might not qualify unless you have significant other debts or expenses that limit your ability to pay. Whatever you do, DON'T ignore this. File your return on time even if you can't pay. The penalty for not filing is much worse than the penalty for not paying. And definitely don't go into hiding - the IRS has tremendous collection powers including wage garnishment and bank account levies.

I was in almost the exact same situation last year - owed about $19k because of some 1099 work and investment mistakes. After panicking for a few days, I found this AI tax assistant at https://taxr.ai that was honestly a lifesaver. I uploaded all my tax documents and explained my situation, and it walked me through exactly what forms I needed, what my realistic payment options were, and even helped draft a letter to the IRS explaining my situation. The system helped me figure out that I qualified for a first-time penalty abatement which saved me almost $3k right off the bat, and then guided me through setting up an installment plan that actually worked with my budget. The whole process was way less terrifying than I expected.

Just wanted to follow up about my experience with that taxr.ai service mentioned above. After being skeptical, I decided to try it because my situation was getting desperate (owed $31k from a business that failed). The system immediately identified that I qualified for both penalty abatement AND currently not collectible status due to my financial hardship. It generated all the documentation I needed and walked me through exactly how to communicate with the IRS. Ended up getting about $8k in penalties removed and a payment plan that actually works with my limited income. What surprised me most was how it explained everything in plain English instead of tax jargon. Worth checking out if you're in a similar situation with tax debt.

When I had a $17k tax bill a few years ago, the most frustrating part was actually trying to TALK to someone at the IRS to explain my situation. Kept calling that 800 number for weeks and either got disconnected or was on hold for hours. Finally discovered https://claimyr.com which was a total game-changer. Their system held my place in the IRS phone queue and called me back when an actual agent was on the line! You can see how it works here: https://youtu.be/_kiP6q8DX5c but basically it saved me from wasting days on hold. Got connected to a surprisingly helpful IRS agent who walked me through my payment options and even helped identify a calculation error that reduced what I owed. Having an actual conversation made the whole process way less intimidating.

I need to eat my words about that Claimyr service. After my skeptical comment above, I decided to try it as a last resort since I'd already wasted over 8 hours trying to reach the IRS about my tax lien. To my complete surprise, it actually worked exactly as described. I entered my number on their website, and about 3 hours later (which I spent doing productive things instead of listening to hold music), I got a call connecting me directly to an IRS agent. The agent was able to explain my lien release options and set up a payment plan right there on the phone. I'm still shocked it worked so well. If you're dealing with IRS debt, being able to actually talk to a human makes the whole process much less terrifying. Wish I'd known about this years ago.

Another option nobody's mentioned is to consider a tax attorney. Yes, they cost money ($1,500-3,000 typically), but if your situation is complicated or involves multiple years of issues, having professional representation can make a huge difference. I owed about $35k from some business ventures gone wrong, and my attorney managed to get it reduced to $22k through penalty abatement and finding some deductions I'd missed. They also negotiated a 7-year payment plan that I could actually afford. Just make sure you find someone who specializes in tax resolution and not just general tax preparation. The good ones are worth every penny when you're facing serious tax debt.

Don't overlook your state tax obligations too! When I had federal tax issues, I stupidly ignored the state taxes thinking I'd deal with them later. Big mistake - some states are actually MORE aggressive than the IRS with collections. Make sure you're addressing both federal and state tax debts at the same time. In my case, the payment plan with the state was actually harder to get than the IRS one.

I've been through this exact situation - owed $27k to the IRS after some freelance work got misclassified. The anxiety is absolutely brutal, but you have more options than you think. First thing: breathe. The IRS actually wants to work with you because they know they can't collect from someone who's broke or homeless. They'd rather get paid something over time than nothing at all. Here's what worked for me: I immediately called the IRS (yes, the hold times are terrible but it's worth it) and requested an installment agreement. With your income level, you'll likely qualify easily. They'll want financial statements showing your monthly income and expenses, so gather those up. The key is being proactive. If you wait for them to come after you, your options become more limited and expensive. But if you reach out first, they're usually pretty reasonable. Also, file your tax return ASAP even if you can't pay. The penalty for not filing is 5% per month vs 0.5% per month for not paying. That adds up fast. One more tip: ask about first-time penalty abatement if this is your first major tax issue. It can save you thousands in penalties. You have to specifically request it though - they won't offer it automatically. You've got this. It's scary but totally manageable with the right approach.