Owe the IRS? Here’s How to Find Tax Debt Relief This Season
These IRS programs let you pay in installments, settle for less or pause collections
Key Takeaways
- File your tax return on time even if you can't pay—it lowers penalties.
- IRS payment plans let you break your bill into manageable monthly chunks.
- An Offer in Compromise can help you settle tax debt for less than you owe.
Tax season is here, and for many Americans, that means facing a stressful reality: you owe the IRS money and aren’t sure how to pay. Maybe gas and food prices have squeezed your budget. Maybe your retirement accounts have taken a hit. Whatever the reason, not having enough money to cover your tax bill can feel overwhelming.
But here’s the good news: the IRS has multiple programs designed to help people who can’t pay in full, but you must take the first step and make contact. From payment plans to debt reduction programs, there are real options that can ease the burden. Here’s what you need to know about finding tax debt relief.
File your return—even if you can’t pay
Whatever you do, don’t delay filing your tax returns — even if you can’t pay the entire bill. If you don’t file your returns, your penalties will be higher than if you file and don’t pay in full.
Sending in some kind of payment (even if it’s a fraction of what you owe) and following that up with additional payments every month will reduce penalties. It also gives you time to consider your next move and puts you in a better light with the IRS.
Set up a payment plan
Instead of stressing about one massive bill, consider breaking it into manageable pieces. “Instead of paying one lump sum, you can ask for an installment agreement, which lets you break up what you owe into smaller monthly payments, taking the pressure off,” says Bruce McClary, certified credit counselor with the nonprofit agency National Foundation for Credit Counseling. “If the balance is less than $50,000, approval is often automatic.” Search “payment plan” on IRS.gov.
The IRS offers two types of installment plans. The short-term payment plan gives you up to 120 days to pay what’s due if you owe less than $100,000 in taxes, penalties and interest. The long-term payment plan is longer than 120 days, paid in monthly payments, if you owe less than $50,000.
Applying for a payment plan can be done online. Once you’ve applied, you’ll receive immediate notification if your plan has been approved — all without having to call or write to the IRS.
Request a reduction
If the total is more than you can realistically repay, ask about an Offer in Compromise, McClary advises. “This allows you to settle your debt for less than the full amount you owe.” Check eligibility requirements on the IRS site.
This program allows you to settle your debt for what you feel you can pay. If the IRS accepts your offer, you’ll have two payment options to choose from: a lump sum cash or a periodic payment. Under the lump sum plan, you’re expected to pay your tax debt in five or fewer payments within five months. Under the periodic payment plan, you will pay monthly until your tax liability is paid in full in six to 24 months.
Press pause on collection
The IRS provides an option for those who lose their income and can’t make any payments, says McClary. “The IRS will temporarily delay collection until your financial situation improves.” Simply call the IRS at 800-829-1040 and ask for “currently not collectible” status. Interest and penalties continue to build, so this works best for short periods.
In seeking a delay, you’ll have to fill out a Collection Information Statement and provide proof of your financial status. This could include information about your assets and monthly income and expenses. If the IRS agrees to a delay based on your application, your tax debt doesn’t just go away; it simply means the IRS agrees that you can’t afford to pay at this time. If you do delay paying, you’ll actually end up paying more down the road because interest and penalties will be charged until you pay up in full.
Reduce what you owe with credits and deductions
One of the best ways to lower your tax bill — and potentially avoid debt altogether — is to make sure you’re claiming every credit and deduction available to you.
“A tax deduction is going to lower your taxable income before calculating what tax you owe; while a tax credit is going to lower what you owe, dollar for dollar or get you a bigger refund,” says Katharina Reekmans, enrolled agent and tax expert with TurboTax. “Some can even get a tax credit even if they don’t owe anything, as some tax credits are refundable, which means that even if you have no tax liability you will receive a refund.”
Credits worth exploring
- Lifetime Learning Credit: You can receive up to $2,000 as a dollar-for-dollar credit on expenses paid for post-secondary education, including graduate school, vocational programs and part-time courses, shares Emily Luk (CFA/CPA), CEO and co-founder of the money management platform Plenty.
- Other Dependent Credit: “If you are caring for someone other than a child dependent, you can take advantage of this tax credit, which equals $500 per non-child dependent that you support,” shares Reekmans.
- Residential Energy Credit: Installing solar panels, energy-efficient windows, doors, insulation or energy-efficient HVAC systems in your home may mean you qualify for this credit, says Luk.
- Retirement Savings Contribution Credit: This credit allows people to claim a credit worth up to $1,000 ($2,000 for married couples filing jointly) for contributions to traditional IRAs and 401(k)s.
Deductions that could lower your bill
- Medical expenses: “They may be deductible if your expenses exceed 7.5% of your adjusted gross income in 2024 and only if you are able to itemize your tax deductions,” says Reekmans.
- Charitable donations: “In addition to monetary donations, out-of-pocket costs related to volunteering, such as supplies and mileage (at 14 cents per mile), can also be deductible,” adds Reekmans. “It is not just large donations that count; keep track of smaller items like a cake donated for a charity’s bake sale.”
- HSA contributions: If you contribute to a Health Savings Account, your after-tax HSA contributions are considered tax-deductible.
- State and local taxes: You can deduct up to $10,000 of property, sales or income taxes you have already paid to state and local governments.
If a loved one left behind tax debt
If you’re filing taxes for a lost loved one who owed money to the IRS, don’t panic. Most of the time, the money will come out of the deceased’s estate, however if the amount there isn’t enough to cover the debt, the IRS might just cancel it, says Lisa Greene-Lewis, a CPA with TurboTax.
Most of the time, executors and children are not responsible for the fees, but if they are legally tied to the debt in any way, that could change. Greene-Lewis recommends gathering receipts for any deductible expenses so that you can maximize the descendant’s deductions on their final return, which could reduce or even eliminate any taxes owed.
When to get help from a tax pro
If you aren’t wealthy, don’t owe an exorbitant amount and simply want a payment plan, then chances are good you probably don’t need help from a tax professional. If your situation is complex, you’re feeling overwhelmed and you owe a substantial sum, then a tax pro could be worth the time and cost. Experts, however, caution that you should carefully vet who you use.
The bottom line? Owing the IRS money is stressful, but ignoring the problem only makes it worse. Whether you set up a payment plan, negotiate a compromise or press pause on collection, taking action now puts you in control.
A version of this story first appeared in the April 20, 2026, issue of Woman’s World magazine.
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