Tax Debt Relief for IRS & State Tax Debts
When a tax balance grows past what you can pay, we find the resolution the law allows, then negotiate it with the IRS or the state for you.
A Tax Balance You Cannot Pay Has Options
A balance due rarely stays the same size. Penalties plus interest grow every month, while the notices move from reminders to a lien, then to a levy on wages or bank accounts. Each stage that passes without a response narrows what can still be negotiated.
Our CPAs represent individuals as well as businesses before the IRS, the California Franchise Tax Board, state tax agencies across all 50 states. We start by pulling your IRS account transcripts, which show every assessment, payment, penalty on record, then compare them with what you believe you owe. The plan is built on that record, not on the notices alone.
Facing an audit rather than a balance due? Our IRS audit representation page covers that work.
Our Tax Debt Relief Services Include:
- Offers in Compromise
- IRS installment agreements & payment plans
- Currently Not Collectible status
- Penalty abatement, including first-time abatement
- Federal tax lien release & withdrawal
- Levy & wage garnishment release
- Collection Due Process appeals
- Trust Fund Recovery Penalty defense
- Innocent spouse relief
- FTB, EDD & CDTFA tax debts
Offer in Compromise
With an Offer in Compromise, the IRS agrees to close out the debt in exchange for a smaller sum. Acceptance turns on a calculation: what your assets would bring, plus what your monthly income leaves after basic costs, sets the lowest figure the IRS will take. An offer is filed on Form 656 with complete financial disclosure. A low-income certification on the form, available to individuals only, removes the cost of applying.
An offer is not the right answer for everyone. When your income or assets show the IRS could collect the whole balance over time, an offer is likely to be rejected, so we calculate the probable outcome before preparing one.
IRS Payment Plans
Most taxpayers resolve a balance through a payment plan. The IRS sorts them by size:
- Short-term plan. Up to 180 days to pay a combined balance under $100,000.
- Guaranteed installment agreement. Available when the tax owed is $10,000 or less, paid within three years, for taxpayers with no filing or payment failures over the past five years who have not had another agreement in that time.
- Simple Payment Plan. For assessed balances of $50,000 or less, paid in full before the collection period ends.
- Larger balances. Above those limits, the IRS asks for a detailed financial statement before it agrees to terms.
Interest keeps accruing while a plan runs, so we look at whether a larger payment up front would lower the total cost.
Currently Not Collectible Status
Some taxpayers have nothing left once rent, food, other necessities are paid. For them, a hardship designation called currently not collectible puts most enforcement on hold. The balance itself stays on the books. The debt still grows each month. A lien remains possible, refunds can be kept to reduce what you owe, the IRS checks back on your income periodically.
Timing matters here. Federal collection usually ends a decade after the tax is assessed, a clock that keeps running during this status. For some taxpayers, that makes it a lasting resolution.
Penalty Relief
Penalties often make up a large share of what you owe. First-time abatement removes failure-to-file, failure-to-pay, or failure-to-deposit penalties for a taxpayer with a clean record over the previous three years, as long as all required returns are filed with the tax paid or a payment plan in place.
The IRS has announced an automatic penalty relief program that replaces first-time abatement for returns originally due on or after January 1, 2027. Where the record is not clean, reasonable cause, such as a serious illness or a disaster, can still support a request.
Liens, Levies & Wage Garnishment
Once the IRS files public notice of a lien, anyone searching property records can see the government's claim against what you own. Once the balance is paid off, the IRS has 30 days to lift it. In some cases we can request a withdrawal on Form 12277, which removes the public notice of the lien.
A levy takes the money itself, from wages, bank accounts, or business receivables. No levy can happen without a final warning letter first, after which you have 30 days to act. That notice also opens your right to a Collection Due Process hearing, requested on Form 12153 by the deadline printed on the letter. A timely request generally holds off the levy while Appeals reviews the case. We file the request, then put forward an alternative such as a payment plan or an offer.
Missed the deadline? An equivalent hearing can still be requested within one year, though it carries no right to review by the Tax Court.
Payroll Tax Debts & the Trust Fund Recovery Penalty
Unpaid payroll taxes are treated more seriously than most tax debts, because part of the money was withheld from employees' paychecks. Under the Trust Fund Recovery Penalty, the IRS can hold owners, officers, or other responsible people personally liable for 100 percent of the unpaid trust fund taxes: income tax withheld from wages, along with the employee share of Social Security plus Medicare.
The penalty requires both responsibility and willfulness, so it matters who signed the checks, who decided which bills got paid first. We assemble that record, represent you in the IRS interview, then work to resolve the business balance before it becomes personal. Our payroll service keeps deposits current once the debt is settled.
Innocent Spouse Relief
Signing a joint return puts each spouse on the hook for every dollar of the tax. When a balance comes from a spouse's or former spouse's income or errors that you did not know about, Form 8857 asks the IRS to relieve you of it. Most requests must be filed within two years of the first collection action against you. Equitable relief from an unpaid balance can be requested any time within the 10-year collection period.
California Tax Debts: FTB, EDD & CDTFA
State debts follow their own rules. The state's clock is the bigger difference. Where the IRS gets roughly a decade, the Franchise Tax Board can generally pursue a balance for 20 years. It does accept payment plans, along with offers in compromise under a program of its own.
The EDD pursues unpaid state payroll taxes, while the CDTFA pursues unpaid sales tax. Each runs a settlement program evaluated apart from the IRS. We coordinate every agency at once, so a payment arranged with one does not leave you short with another.