6 ways tax relief can help with your 2024 debt

CBS News

15-05-2025

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If you're dealing with unpaid IRS tax debt, a tax relief program could help you tackle the issue and get your finances back on track.
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Another stressful tax season has come and gone, much to the relief of taxpayers across the nation. But while the tax filing deadline has passed, that isn't necessarily the end of the tax-related hassles for a large portion of taxpayers. Millions of Americans are now stuck grappling with the idea that they owe more than they can afford to pay to the Internal Revenue Service (IRS) for their 2024 taxes, especially as the penalties and interest compound on their unpaid taxes.
And, any extra financial burden may be especially heavy right now, whether it's due to missing the deadline, underpaying on your taxes or simply being unable to pay the balance in full. After all, today's landscape of economic uncertainty and high interest rates has left many households struggling to keep up with their regular bills and debt, much less their unexpected tax obligations. So, it's easy for the pressure to pile up as the threat of IRS enforcement action, like wage garnishment and liens, looms.
If you're dealing with this type of tax-related issue, it's important not to panic. Tax relief programs are still available, and they may be more helpful than you realize.
Speak to a tax relief expert about your options now.
6 ways tax relief can help with your 2024 debt
Whether you're facing a surprise bill, penalties for late filing or mounting tax debt from previous years, pursuing tax relief could help. Here's how:
Installment agreements can help you pay over time
If you're staring down a tax bill that you can't pay in full, getting help from a tax relief service to set up an IRS installment agreement could be your first line of defense. Rather than putting that tax debt on a high-interest credit card or taking out a personal loan, you can work with a tax expert or directly with the IRS to arrange to pay the IRS over time.
For tax debts under $50,000, the standard term is up to 72 months, giving you substantial breathing room. While penalties and interest will continue to accrue until your balance is paid, the rates are typically far more favorable than credit card interest rates, which are hovering around 22% right now. And, by keeping your tax debt separate from your consumer debt, you're also protecting your credit score from the impact of increased credit utilization.
Find out more about the tax debt relief programs available to you now.
Penalty relief may help reduce what you owe
The IRS automatically applies failure-to-file and failure-to-pay penalties to late tax returns and unpaid balances. These penalties can grow quickly, especially when combined with interest charges. But if you've generally maintained a good tax compliance history and have a reasonable cause for failing to meet your tax obligations (such as serious illness, natural disasters or unavoidable absence), the IRS' First-Time Penalty Abatement program might work for you.
This relief option is particularly valuable because penalties can add up quickly. Failure-to-pay penalties alone accrue at 0.5% per month up to 25% of the unpaid tax. By working with a tax relief expert to request abatement, you could potentially reduce your overall tax debt by hundreds or even thousands of dollars, freeing up those funds to tackle other debts more aggressively.
Offers in Compromise could help you settle your debt for less
For those facing more significant financial hardship, another tax relief option — an Offer in Compromise (OIC) — could allow you to settle your tax debt for less than the full amount owed. This isn't a quick fix or an easy process, but for qualifying taxpayers, it can provide substantial relief.
When you request an OIC, the IRS evaluates your ability to pay based on income, expenses, asset equity and future earning potential. Approval rates have historically been low for this program, but working with a professional can increase the odds of success when trying to set up an OIC. And, if successful, this option could save you thousands of dollars and help clear your path to financial recovery.
Currently Not Collectible status buys you time
If you're experiencing severe financial hardship, you can work on your own or with a tax relief specialist to request that the IRS designate your account as Currently Not Collectible (CNC). The CNC status doesn't eliminate your tax debt, but it does temporarily halt collection activities, giving you breathing room to address your more immediate financial needs without the pressure of IRS collections.
Filing or amending your return may help reduce what you owe
Sometimes, the issue isn't that you owe money. It's that your tax return was incorrect. If you rushed to file your taxes by the April deadline and now realize you missed deductions, credits or income adjustments, working with a tax relief specialist to amend your return could lower your liability. Or, if you haven't filed at all yet, filing as soon as possible is almost always better than continuing to delay. Filing triggers the clock for many relief options and may help you qualify for payment plans or penalty relief sooner.
The bottom line
Owing money to the IRS can feel overwhelming, especially if you're already dealing with high inflation, credit card debt or a tight budget. But tax debt doesn't have to be a permanent burden. With the right mix of IRS programs and strategic guidance, you can tackle your 2024 tax bill, and even past debt, in a manageable way. It's important to act now, though, before penalties pile up further or collection actions kick in.