Owe $250,000 to IRS - desperately need payment plan advice!

15 I've worked with many clients in similar situations. The attorney fee of $13,500 is actually within the normal range for a complex case involving $250,000 in tax debt. However, you have options beyond immediately hiring an attorney. First, you should know the IRS has several programs for taxpayers who can't pay their full tax debt. The main ones are installment agreements, Offer in Compromise (OIC), and Currently Not Collectible status. An installment agreement lets you pay over time, an OIC lets you settle for less than the full amount, and Currently Not Collectible temporarily pauses collection if you can prove financial hardship. Before hiring anyone, I'd recommend calling the IRS directly to discuss what payment options might be available based on your specific situation. The IRS is often willing to work with taxpayers who proactively reach out.

8 Hey there, I went through something similar last year (not quite as much as you - I owed about $180k). After trying to handle it myself and getting nowhere, I discovered a service called taxr.ai (https://taxr.ai) that really helped me understand my options before I spent thousands on professional representation. They analyzed all my tax documents and gave me a clear breakdown of what settlement options I might qualify for. It was super helpful because I went into discussions with the IRS knowing exactly what I could reasonably ask for instead of just guessing. The report they generated also helped me realize I had decent leverage for an Offer in Compromise since my financial situation wasn't great. Their document analysis saved me a lot of time figuring out what programs I qualified for and what documentation I needed to gather for my case.

19 I have to admit I was completely wrong about taxr.ai. After my skeptical comment, I decided to try it myself since I also had some tax issues (not nearly as serious as yours). The document analysis was surprisingly thorough - it caught several things I missed that would have caused problems in my negotiations with the IRS. The assessment they provided helped me realize I qualified for a partial payment installment agreement that my own research hadn't turned up. They don't replace a tax pro for complex negotiations, but they definitely give you a clear picture of your options before you spend big money on representation. I ended up using their report to handle my own case and got approved for exactly the payment plan they suggested I'd qualify for.

3 If you're trying to reach the IRS to discuss your options, good luck! I spent WEEKS trying to get through their phone system with no success. After almost giving up, I found Claimyr (https://claimyr.com) which basically holds your place in the IRS phone queue and calls you when an agent picks up. You can see how it works here: https://youtu.be/_kiP6q8DX5c I was honestly shocked when I got a call back with an actual IRS agent on the line after trying unsuccessfully for so long. I had a $60k tax bill (not as much as you), but the agent was actually really helpful once I got through. They walked me through my payment options and I was able to set up an installment agreement during that first call. For a debt as large as yours, you'll probably need professional help eventually, but having a direct conversation with the IRS first can give you a better understanding of your situation.

19 I'm completely embarrassed to admit this, but that Claimyr service actually works. After posting my skeptical comment, I was so annoyed by the whole situation that I tried it when I needed to call about an issue with my refund. Instead of wasting half my day on hold, I got a call back when a real IRS agent was on the line. The agent helped me resolve my issue in about 15 minutes. For something as serious as a $250k tax debt, being able to actually speak with the IRS collections department without the hold time nightmare would be incredibly valuable. I still think you'll need professional help with a debt that large, but having direct conversations with the IRS first will give you a much better understanding of what you're facing.

22 I used to work as a tax resolution specialist. For a $250k debt, that attorney fee isn't outrageous but it is on the high side. Here's what you should know: 1) You don't necessarily need an attorney - an Enrolled Agent or CPA with tax resolution experience can often handle these cases for significantly less money (maybe $5-8k range) 2) Be wary of anyone promising they can settle your debt for "pennies on the dollar" - those are usually scams 3) With a debt that size, you'll likely need to provide extensive financial documentation regardless of who represents you 4) The IRS generally expects you to exhaust your assets (selling investments, taking loans against property) before they'll accept a reduced settlement What's your current income and asset situation? That greatly affects what options are realistic for you.

14 i went thru similar situation owing $120k. biggest advice: DO NOT USE ONE OF THOSE TAX RESOLUTION FIRMS YOU SEE ADVERTISED ON TV!!! total scammers took $4000 from me and did NOTHING. ended up hiring a local CPA who specializes in tax problems for $3500 flat fee. she got me on a $1200/month payment plan and the IRS agreed not to put a lien on my house. the payment amount is based on your income and expenses so be ready to provide LOTS of documentation about everything you spend money on each month.

I'm dealing with a similar situation (though thankfully not quite as much - around $180k). One thing I learned from my research is that you should absolutely get multiple consultations before committing to that $13,500 fee. I found Enrolled Agents who specialize in tax resolution charging significantly less for similar services. Also, don't let the IRS collections timeline pressure you into making hasty decisions. While you don't want to ignore this, you do have time to explore your options properly. The IRS would rather work with you on a payment plan than go through the expensive process of trying to collect through liens and levies. Have you received any formal collection notices yet, or are you getting ahead of this based on what you discovered about the unreported income? That timeline can affect your negotiating position and urgency level.

I can't emphasize enough how important it is to act quickly but thoughtfully with a debt this size. $250k puts you in serious collection territory once the IRS starts the enforcement process. Here's my practical advice from handling similar cases: 1) That $13,500 attorney fee isn't unreasonable for the complexity, but shop around. Get at least 3 consultations - mix of attorneys and Enrolled Agents. 2) Start gathering ALL your financial documentation now: bank statements, pay stubs, mortgage/rent, utilities, insurance, car payments, etc. The IRS will want to see everything to determine your ability to pay. 3) Consider your long-term strategy. With your current $95k income and $250k debt, you're looking at either a long-term installment agreement or potentially an Offer in Compromise if your financial situation is truly dire. 4) Don't panic, but don't delay either. The interest and penalties keep adding up daily. Even if you end up on a payment plan, stopping the penalty clock sooner rather than later saves you money. The IRS is actually pretty reasonable to work with when you approach them proactively rather than waiting for them to come after you. You're doing the right thing by addressing this head-on.