• What does it mean to resolve a tax debt?

What does it mean to resolve a tax debt?

To the IRS, resolving a tax debt means getting the debt under control. That's also the the taxpayer's goal. Well, not exactly the same. A taxpayer would like the debt to go away. And that rarely happens.

In order to resolve a federal tax debt, there are 2 steps.

First

The taxpayer must first be "in compliance." That means that the taxpayer has filed all of the returns that are required so that the IRS knows how much the taxpayer's owes.

Second

When it's not possible for the taxpayer to pay their debt in full within about 120 days, the IRS will seek to get the debt under control. That means setting up a payment plan or determining that the taxpayer is unable to make payments.