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There are 6 basic solutions to resolving IRS tax debt. The probable solution for an individual taxpayer facing back taxes is directly related to their financial situation and their ability to pay the taxes owed.
- Offer in Compromise - Taxpayers who cannot afford to pay back the entire debt amount may qualify for a settlement.
- Installment Agreement - Based on the debt amount and the taxpayer's financial situation, it is possible to arrange a monthly payment plan with the IRS to satisfy the liability.
- Tax Bankruptcy - In some cases it is possible to discharge taxes owed through filing a bankruptcy.
- Statute of Limitations IRS has a 10 year statute of limitations. After the 10 years have passed, the tax debt will expire.
- Tax Abatement In some cases, the IRS will adjust the amount owed based on individual circumstances.
- Currently Not Collectible - When the taxpayer's financial situation does not accomodate making payments against the debt, the IRS may place that taxpayer's account on hold.
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