AwayTax

Tax Resolution

Tax Settlement

A tax settlement is a formal arrangement between a taxpayer and a tax authority to settle tax debt for less than the full amount due. To reach a settlement, you must meet several requirements and successfully negotiate with the IRS or state tax authority.

Our Tax Settlement Services

In addition to settling IRS tax debts, we also help with:

  • Resolving bank levies
  • Removing tax liens
  • Reducing tax penalties
  • Filing unfiled tax returns
  • Releasing wage garnishments
  • Individual & business tax relief
  • Federal and state back tax settlement

Who Qualifies for Tax Settlement?

While qualifications vary on a case-by-case basis, tax settlement programs are designed to help taxpayers experiencing:

  • Job loss or significant income reduction
  • Medical emergencies or serious illness
  • Divorce or death of a spouse
  • Natural disaster impact
  • Major unexpected financial hardship

The IRS evaluates each case individually, considering current income and expenses, medical conditions, disabilities, and compliance history.

IRS Tax Settlement Program

Offer in Compromise (OIC)

An Offer in Compromise is an IRS settlement program that resolves taxpayer debt for less than the full amount the IRS claims they owe. While an OIC is one of the best options to reduce your debt, the criteria can be strict and not everyone will qualify. This program is typically reserved for taxpayers in difficult financial situations who lack the resources to pay off their debt in full.

Tax Settlement Alternatives

Currently Not Collectible (CNC)

CNC is a status assigned to taxpayers who cannot reasonably pay their tax debt due to economic hardship. It does not erase your liability, but it provides temporary relief and suspends IRS collection actions until your situation improves.

First-Time Penalty Abatement

Penalty Abatement allows qualified taxpayers to remove certain penalties from their balance, reducing their overall tax liability. You may qualify if it's your first tax penalty or you meet other IRS criteria — including no penalties in the last three years and no unfiled returns.

Partial Payment Installment Agreement (PPIA)

A PPIA is an arrangement with the IRS to make reduced monthly payments based on your current financial situation. If you are unable to pay your full tax debt, a PPIA allows you to pay less than the total amount owed over time.

How to Settle Tax Debt With the IRS

  1. 1Gather financial documentation — tax returns, bank statements, pay stubs, and asset records
  2. 2Ensure you are current with tax filings and have no open bankruptcies
  3. 3Choose the most appropriate settlement option for your situation
  4. 4Submit a complete application with supporting documentation
  5. 5Negotiate effectively with the IRS — or let AwayTax handle it for you

Common Mistakes to Avoid

  • Missing application deadlines
  • Incomplete financial documentation
  • Ignoring IRS communications
  • Failing to maintain compliance during the process

Find Out If You Qualify for Tax Settlement

Get the help you need. Our professionals handle everything — from documentation to IRS negotiation.

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