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Owing back taxes to the IRS can feel overwhelming. Interest and penalties pile up fast, and the fear of aggressive collection tactics like liens or levies can weigh heavily on taxpayers. But what many don’t realize is that there are legitimate, legal ways to reduce your tax debt—methods that the IRS doesn’t openly advertise.
We’ll uncover effective strategies you can use to lower what you owe, and why working with a tax relief specialist like Priority Tax Relief can make all the difference.
Legal Strategies to Reduce Tax Debt:
- Offer in Compromise (OIC): This program allows taxpayers to settle their tax debt for less than the full amount owed. The IRS considers your ability to pay, income, expenses, and asset equity. If paying your full tax bill would cause financial hardship, you may qualify.
- Penalty Abatement: You may be eligible to have penalties removed if you have a reasonable cause, such as a serious illness, natural disaster, or incorrect advice from a tax professional. This can significantly reduce your total debt.
- Installment Agreements: If you can’t pay your full balance upfront, you may qualify for a payment plan with the IRS. Spreading payments out over time can make your debt more manageable.
- Currently Not Collectible (CNC) Status: If you can prove that paying your taxes would prevent you from covering necessary living expenses, the IRS may temporarily pause collection efforts.
- Innocent Spouse Relief: If your spouse (or former spouse) made tax errors or underreported income without your knowledge, you might not be held responsible. This relief protects you from paying a tax debt that isn’t truly yours.
- Statute of Limitations: The IRS has 10 years to collect on most tax debts. In some cases, if the debt is near expiration, strategic planning can prevent unnecessary payments.
- Amended Returns: Filing an amended return can correct mistakes and potentially reduce the amount you owe. A tax professional can help identify opportunities to do this.
- Tax Law Expertise: New legislation and credits are constantly being introduced. A tax relief expert can ensure you take advantage of every legal avenue available.
At Priority Tax Relief, we specialize in navigating the complexities of IRS programs. We advocate on your behalf, build your case, and help you access the best options to resolve your debt legally and efficiently.
Frequently Asked Questions: How to Reduce Debt Legally
Can I really settle my tax debt for less than I owe?
Yes, through the Offer in Compromise program—if you qualify.
Does using a tax relief company guarantee success?
No one can guarantee results, but experienced firms like Priority Tax Relief improve your chances significantly.
Will the IRS forgive my debt if I can’t pay?
Possibly, if you qualify for CNC status or OIC.
Is penalty abatement common?
It depends, but many taxpayers qualify due to valid hardships or first-time offenses.
How long does tax relief take?
It varies—from a few weeks to several months, depending on your case complexity.
Do I need a lawyer for tax relief?
Not necessarily. Certified tax professionals or enrolled agents can handle most cases.
