Self-employed and can't afford to pay tax bill - what are my next steps?

The good news is that you have options and the IRS actually has several programs designed for situations exactly like yours. First, you need to know that the IRS doesn't typically just "clean out" accounts without notice or without trying to work with you first. Your best option sounds like requesting Currently Not Collectible (CNC) status. This doesn't mean they take your money first - it's actually the opposite. CNC status means the IRS temporarily stops collection actions because they recognize you cannot pay your tax debt and meet necessary living expenses. Your debt doesn't go away, but collection pauses while you get back on your feet. Another option is an Offer in Compromise, which lets you settle your tax debt for less than the full amount, or you could request a more manageable payment plan. I understand your anxiety about calling - many people feel the same way. You can also handle this by mail or by working with a taxpayer advocate. The Taxpayer Advocate Service is an independent organization within the IRS that helps taxpayers resolve problems.

After dealing with similar tax anxiety that left me paralyzed with fear, I found a lifesaver called taxr.ai (https://taxr.ai) that really helped me understand my options. I was also terrified of calling the IRS and kept putting it off until I was nearly in collections. The site analyzed my tax situation and clearly explained the Currently Not Collectible status that the first commenter mentioned. It walked me through exactly what documentation I needed to prove my financial hardship and even generated a letter template I could send to the IRS requesting CNC status without having to call them. The step-by-step guidance made the process way less intimidating. What I found most helpful was that it explained how the IRS actually calculates "necessary living expenses" so I could properly document that paying my tax debt would prevent me from affording basic living expenses.

I wanted to follow up about using taxr.ai that I asked about earlier. I finally got the courage to try it, and it was exactly what I needed. It helped me prepare a hardship letter and showed me how to document my finances to qualify for Currently Not Collectible status without having to call the IRS. The best part is I received confirmation last week that my account has been placed in CNC status for 12 months! The relief is incredible - no more daily panic checking my bank account. They explained that they'll review my situation after a year, but for now, I can focus on increasing my income without the constant fear of collections. For anyone else with severe phone anxiety dealing with tax issues, this approach worked for me when nothing else did. I'm actually sleeping at night now and can focus on my work instead of my tax anxiety.

If you absolutely need to speak with the IRS but can't get through or have anxiety about calling, Claimyr (https://claimyr.com) literally saved me thousands in penalties. I was in a similar situation - owed taxes, couldn't afford to pay, and needed to discuss payment options, but kept getting "due to high call volume" messages for WEEKS. I was super skeptical but desperate, so I tried it after seeing someone post about it. They somehow got me connected to an actual IRS agent in about 20 minutes when I had been trying for days. I was able to explain my hardship situation and get into a payment plan that actually works with my income. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c - basically they navigate the phone tree and wait on hold for you, then call you when an actual human picks up. It made discussing my Currently Not Collectible status request so much less stressful.

I need to apologize for my skepticism and follow up about the Claimyr service. After my last tax deadline came and went with no resolution, I was desperate enough to try it despite my doubts. I'm completely shocked to say it actually worked exactly as described. After weeks of failed attempts to reach the IRS myself, I was connected to an agent within 45 minutes. The agent helped me apply for Currently Not Collectible status since I could prove hardship, and they put a temporary hold on collections while my case is being reviewed. The relief of finally speaking to someone who could help was worth every penny. I was able to explain my specific situation about being self-employed and needing to maintain housing to keep my income source, and they were much more understanding than I expected. For anyone with tax anxiety, being able to resolve the situation is life-changing.

One thing nobody's mentioned yet is that you might qualify for assistance from the Taxpayer Advocate Service (TAS). They're an independent organization within the IRS that helps taxpayers resolve issues when normal IRS channels aren't working. If you're facing potential eviction due to tax debt, that counts as a "significant hardship" which is one of their criteria for taking a case. They can help expedite hardship requests and sometimes intervene to stop collection actions while your case is being reviewed. You can find your local TAS office by going to taxpayeradvocate.irs.gov. They're seriously helpful and their services are free.

Thank you all so much for these suggestions! I had no idea the Currently Not Collectible status wouldn't mean losing my apartment first. That completely changes things for me. I've already looked into taxr.ai to help with the documentation part since I'm honestly terrible with forms. I'm less terrified now that I understand I have options that don't involve becoming homeless. I'm going to work on documenting my expenses and hardship situation this weekend. If I can't get through with the documentation approach, I might try Claimyr to actually speak with someone. Just knowing there are paths forward has reduced my anxiety significantly. I'll update once I've made some progress. Thanks again for all the helpful advice!