Tax Resolution Options Explained: What You Need To Know?

Having a problem with the Internal Revenue Service (IRS) that has not been handled may be a very anxious situation, especially when it comes to taxes. Understanding your alternatives for tax settlement is essential if you want to achieve financial stability and peace of mind. This is true regardless of whether the issue at hand is unpaid taxes, audits, or any other issues. Throughout this article, we will discuss a variety of tax resolution choices and the information that you need to know about each one.

Understanding Tax Resolution

Tax resolution refers to the process of resolving tax-related problems with the IRS or state tax authorities. It involves negotiating with tax authorities to address outstanding tax liabilities, penalties, or other issues. The goal of tax resolution is to reach a mutually acceptable solution that allows taxpayers to settle their debts and move forward with their financial lives. In such situations, it’s often beneficial to hire professionals from reputable firms like Polston Tax who have the expertise and experience to navigate the complexities of tax resolution effectively.

Offer In Compromise (OIC)

One of the most well-known tax resolution options is the Offer in Compromise (OIC) program. Through this program, qualified taxpayers can agree to pay less than the full amount owed to satisfy their tax obligations. To qualify for an OIC, taxpayers must demonstrate significant financial hardship or doubt as to the collectibility of the full tax debt. The IRS considers factors such as income, expenses, assets, and future earning potential when evaluating OIC applications.

Installment Agreements

For taxpayers who are unable to pay their tax debts in full, installment agreements offer a manageable payment plan to satisfy their obligations over time. Installment agreements allow taxpayers to make monthly payments until their tax debt is paid off. Depending on the amount owed and the taxpayer’s financial situation, the IRS may require financial disclosure to determine the appropriate payment amount.

Currently Not Collectible (CNC) Status

Taxpayers experiencing financial hardship may qualify for Currently Not Collectible (CNC) status, which temporarily suspends IRS collection activities. To qualify for CNC status, taxpayers must demonstrate that paying their tax debt would cause undue financial hardship. While CNC status provides relief from collection efforts, it does not eliminate the tax debt, and interest and penalties may continue to accrue.

Innocent Spouse Relief

In cases where one spouse is held responsible for tax liabilities resulting from the actions of the other spouse, innocent spouse relief may be available. Innocent spouse relief provides relief from joint tax liabilities for qualifying taxpayers who can demonstrate that they were unaware of, or did not benefit from, the erroneous actions of their spouse.

Penalty Abatement

If you owe money on your taxes, you can apply for penalty abatement, which will lessen or reverse the IRS penalties. Reduction of penalties may be given for good reason, such as disease, a natural disaster, or following inaccurate tax advice from an expert. Documentation proving reasonable cause must be submitted by taxpayers to receive a penalty abatement.

Seeking Professional Assistance

The process of resolving tax issues can be difficult to navigate, and it is sometimes recommended to seek the advice of a specialist. With their knowledge in negotiating with the Internal Revenue Service (IRS), tax resolution specialists, such as enrolled agents, certified public accountants (CPAs), and tax attorneys, can provide assistance that is specifically targeted to the taxpayer’s unique circumstances.


Facing tax problems can be overwhelming, but understanding your options for tax resolution can help alleviate stress and uncertainty. Whether you’re considering an Offer in Compromise, an installment agreement, or another resolution option, it’s essential to explore the available avenues and seek professional guidance if needed. By taking proactive steps to address your tax issues, you can work towards achieving financial stability and peace of mind.