IRS Tax Resolution
Options Explained

Understand all the ways you can resolve your IRS tax debt. Compare options to find the best path for your situation.

Quick Comparison

Option	Best For	Timeline	How the IRS decides
OIC	Taxpayers who cannot pay their full tax liability	The IRS does not publish a processing time on its offer in compromise page	The IRS states it generally approves an offer when the amount offered represents the most it can expect to collect within a reasonable period of time. It names the factors it considers: ability to pay, income, expenses and asset equity. It publishes a Pre-Qualifier tool for a preliminary view.
Payment Plan	Taxpayers with steady income who can afford monthly payments	The IRS does not publish a decision time	The IRS publishes balance thresholds that determine which plans can be applied for online and what financial documentation is required. Where a proposed monthly amount does not meet its requirements, the IRS states it directs the taxpayer to Form 433-H, 433-F or 433-B.
CNC Status	Taxpayers experiencing severe financial hardship	The IRS does not publish a decision time	The IRS states it may temporarily delay collection until a taxpayer's financial situation improves, and that it may ask for a Collection Information Statement — Form 433-F, 433-A or 433-B — together with proof of financial status.
Penalty Relief	Situations where the same return type was filed on time for the prior three years and no penalty was assessed in that window — the timely compliance history the IRS tests for administrative relief	The IRS states some penalties may be reduced or removed over the phone using the number on the notice or letter, and that a written request uses a signed statement or Form 843	The IRS states reasonable cause is determined case by case considering all the facts and circumstances, and that which reasons qualify depends on the penalty and the governing law. It also names factors that do not generally qualify on their own, including reliance on a tax professional and lack of funds.
Pay in Full	Taxpayers who have the funds available now and want to stop interest and penalties from growing further	The IRS does not publish one processing time across all methods	There is no IRS determination to describe — paying in full is not a program with eligibility conditions or an approval step. The only real question is whether the funds are available now.
Short-Term Plan	Taxpayers who can pay the full balance within 180 days and want to avoid any setup fee	The plan itself runs 180 days or less, by definition	The IRS publishes an application threshold for the ONLINE channel — individuals owing less than $100,000 in combined tax, penalties and interest — and states that only individuals can apply online for this plan. It does not publish a separate merits-based approval standard beyond filing compliance and the ability to pay within 180 days.
Guaranteed IA	Individuals whose income tax liability, excluding penalties and interest, is small enough to meet the published limit	The Internal Revenue Manual states no managerial approval is required for this agreement type, which the IRS distinguishes from types that do require it	The Internal Revenue Manual states the taxpayer must meet each of the published conditions: the $10,000 income-tax-only ceiling, the three-year-or-CSED payoff window, the five-year clean compliance history, and no installment agreement in that same five-year window. IRC 6159(c) requires the IRS to accept a proposal meeting these conditions — this is not a discretionary financial-hardship determination.
Simple Payment Plan	Individual, out-of-business sole-proprietor, or non-trust-fund business taxpayers whose balance is at or below the published threshold	The Internal Revenue Manual states no managerial approval is required, which the IRS distinguishes from agreement types that do require it	The Internal Revenue Manual sets the standard as an aggregate unpaid balance of assessment of $50,000 or less, for a qualifying taxpayer type (Individual Master File, Out-of-Business Sole Proprietor, or Business Master File non-Trust Fund), calculated using the IRS's own compliance-suite payment calculator. It does not require a full financial statement or managerial sign-off at this threshold.
Full-Disclosure IA	Balances above the Simple Payment Plan's aggregate threshold	The Internal Revenue Manual does not publish a fixed processing time for full-disclosure cases; it distinguishes them from Guaranteed and Simple Payment Plan cases specifically by requiring managerial approval, which the simpler paths do not	The Internal Revenue Manual directs full financial-statement processing whenever a case does not meet the published Guaranteed or Simple Payment Plan conditions. The proposed monthly payment is then set against the taxpayer's disclosed income, allowable expenses under IRS collection financial standards, and equity in assets — a case-by-case financial determination rather than a threshold rule.
Appeals / CDP	Someone who disagrees with a specific IRS collection action — a lien filing, a levy, or a rejected/modified/terminated installment agreement	The IRS publishes no fee and no fixed decision time for either route; deadlines to FILE are specific and short — the date on a CDP notice, or as few as ten business days after a Notice of Seizure for a CAP request	Appeals decides based on the specific facts of the collection action or determination under review, applying the standards published for that channel — for example, whether a lien filing followed proper procedure, or whether a rejected Offer in Compromise correctly applied the IRS's own collection-potential standard. It is not a second chance to relitigate the underlying tax liability except in the limited circumstances the IRS names.
Innocent Spouse	A joint filer who did not know about, and had no reason to know about, errors the other spouse made on a joint return	The IRS does not publish a processing-time figure on its innocent spouse relief page	The IRS decides based on which relief type is sought: innocent spouse relief turns on whether the requesting spouse knew or had reason to know of the understatement; separation of liability turns on marital and living-arrangement status plus the same knowledge test; equitable relief turns on all the facts and circumstances where the other two do not apply.
Injured Spouse	A joint filer whose share of a joint refund was applied to the other spouse's separate debt — back taxes, child support, federal student loans, or other debts subject to offset	The IRS does not publish a processing-time figure on its injured spouse relief page beyond the filing deadline itself: 3 years from the date the return was filed, or 2 years from the date the tax was paid, whichever is later	The IRS calculates the requesting spouse's share of the joint refund — by community property law in community property states, or by its own allocation method elsewhere — rather than making a fault or knowledge determination the way innocent spouse relief does.
Bankruptcy	Understanding, in general terms, what the Bankruptcy Code says determines whether an income tax debt can be discharged	Generally, the Bankruptcy Code measures dischargeability of an income tax debt against dates relative to the bankruptcy filing, not a fixed processing time: (1) 11 U	A federal bankruptcy court, not the IRS, determines dischargeability by applying the Bankruptcy Code's provisions — principally 11 U.S.C. 523(a)(1) and 507(a)(8) — to the debtor's actual assessment dates, filing dates, and conduct (including whether a return was ever filed and whether it was fraudulent). This page states what the Code says; it does not evaluate any reader's facts against it.

Explore Each Option

Offer in Compromise (OIC)

An Offer in Compromise allows you to settle your tax debt for less than the full amount you owe. The IRS may accept an OIC if it represents the most t...

The IRS does not publish a processing time on its offer in compromise page

The IRS states it generally approves an offer when the amount offered represents the most it can expect to collect within a reasonable period of time. It names the factors it considers: ability to pay, income, expenses and asset equity. It publishes a Pre-Qualifier tool for a preliminary view.

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IRS Installment Agreement

An Installment Agreement allows you to pay your tax debt over time through monthly payments. This is the most common resolution option and is availabl...

The IRS does not publish a decision time

The IRS publishes balance thresholds that determine which plans can be applied for online and what financial documentation is required. Where a proposed monthly amount does not meet its requirements, the IRS states it directs the taxpayer to Form 433-H, 433-F or 433-B.

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Currently Not Collectible (CNC)

Currently Not Collectible status is granted when the IRS determines that you cannot afford to pay your tax debt without causing financial hardship. Wh...

The IRS does not publish a decision time

The IRS states it may temporarily delay collection until a taxpayer's financial situation improves, and that it may ask for a Collection Information Statement — Form 433-F, 433-A or 433-B — together with proof of financial status.

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IRS Penalty Abatement

Penalty abatement is the removal or reduction of IRS penalties. The IRS publishes three routes to it: administrative relief, reasonable cause, and sta...

The IRS states some penalties may be reduced or removed over the phone using the number on the notice or letter, and that a written request uses a signed statement or Form 843

The IRS states reasonable cause is determined case by case considering all the facts and circumstances, and that which reasons qualify depends on the penalty and the governing law. It also names factors that do not generally qualify on their own, including reliance on a tax professional and lack of funds.

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Paying Your Tax Debt in Full

Paying the full balance is not a program with an application or an approval step. The IRS states penalties and interest continue to accrue until the b...

The IRS does not publish one processing time across all methods

There is no IRS determination to describe — paying in full is not a program with eligibility conditions or an approval step. The only real question is whether the funds are available now.

Learn More

IRS Short-Term Payment Plan

A short-term payment plan is a distinct product from a long-term installment agreement: no setup fee, a fixed 180-day-or-less window, and a different ...

The plan itself runs 180 days or less, by definition

The IRS publishes an application threshold for the ONLINE channel — individuals owing less than $100,000 in combined tax, penalties and interest — and states that only individuals can apply online for this plan. It does not publish a separate merits-based approval standard beyond filing compliance and the ability to pay within 180 days.

Learn More

Guaranteed Installment Agreement

A Guaranteed Installment Agreement is the one installment agreement type Congress made mandatory rather than discretionary: IRC 6159(c) requires the I...

The Internal Revenue Manual states no managerial approval is required for this agreement type, which the IRS distinguishes from types that do require it

The Internal Revenue Manual states the taxpayer must meet each of the published conditions: the $10,000 income-tax-only ceiling, the three-year-or-CSED payoff window, the five-year clean compliance history, and no installment agreement in that same five-year window. IRC 6159(c) requires the IRS to accept a proposal meeting these conditions — this is not a discretionary financial-hardship determination.

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Simple Payment Plan (Formerly the "Streamlined" Installment Agreement)

The IRS renamed this agreement type. Its Internal Revenue Manual chapter states the subsection title was "Revised ... from Streamlined Installment Agr...

The Internal Revenue Manual states no managerial approval is required, which the IRS distinguishes from agreement types that do require it

The Internal Revenue Manual sets the standard as an aggregate unpaid balance of assessment of $50,000 or less, for a qualifying taxpayer type (Individual Master File, Out-of-Business Sole Proprietor, or Business Master File non-Trust Fund), calculated using the IRS's own compliance-suite payment calculator. It does not require a full financial statement or managerial sign-off at this threshold.

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Non-Simple (Full-Disclosure) Installment Agreement

When a balance does not fit the Guaranteed or Simple Payment Plan thresholds, the Internal Revenue Manual directs what it calls a Non-Simple Installme...

The Internal Revenue Manual does not publish a fixed processing time for full-disclosure cases; it distinguishes them from Guaranteed and Simple Payment Plan cases specifically by requiring managerial approval, which the simpler paths do not

The Internal Revenue Manual directs full financial-statement processing whenever a case does not meet the published Guaranteed or Simple Payment Plan conditions. The proposed monthly payment is then set against the taxpayer's disclosed income, allowable expenses under IRS collection financial standards, and equity in assets — a case-by-case financial determination rather than a threshold rule.

Learn More

Appeals and Collection Due Process as a Resolution Path

Appeal is not an alternative to Offer in Compromise, an installment agreement, or Currently Not Collectible — it is a review of a collection action or...

The IRS publishes no fee and no fixed decision time for either route; deadlines to FILE are specific and short — the date on a CDP notice, or as few as ten business days after a Notice of Seizure for a CAP request

Appeals decides based on the specific facts of the collection action or determination under review, applying the standards published for that channel — for example, whether a lien filing followed proper procedure, or whether a rejected Offer in Compromise correctly applied the IRS's own collection-potential standard. It is not a second chance to relitigate the underlying tax liability except in the limited circumstances the IRS names.

Learn More

Innocent Spouse Relief

Innocent spouse relief addresses tax understated on a joint return because of the other spouse's errors. It is a different doctrine from injured spous...

The IRS does not publish a processing-time figure on its innocent spouse relief page

The IRS decides based on which relief type is sought: innocent spouse relief turns on whether the requesting spouse knew or had reason to know of the understatement; separation of liability turns on marital and living-arrangement status plus the same knowledge test; equitable relief turns on all the facts and circumstances where the other two do not apply.

Learn More

Injured Spouse Relief

Injured spouse relief is a refund-allocation remedy, not a liability remedy. It applies when a joint refund is reduced or seized to pay one spouse's s...

The IRS does not publish a processing-time figure on its injured spouse relief page beyond the filing deadline itself: 3 years from the date the return was filed, or 2 years from the date the tax was paid, whichever is later

The IRS calculates the requesting spouse's share of the joint refund — by community property law in community property states, or by its own allocation method elsewhere — rather than making a fault or knowledge determination the way innocent spouse relief does.

Learn More

Bankruptcy and Tax Debt

This page describes what the Bankruptcy Code states about tax debt. It does not, and cannot, tell you whether your specific tax debt would be discharg...

Generally, the Bankruptcy Code measures dischargeability of an income tax debt against dates relative to the bankruptcy filing, not a fixed processing time: (1) 11 U

A federal bankruptcy court, not the IRS, determines dischargeability by applying the Bankruptcy Code's provisions — principally 11 U.S.C. 523(a)(1) and 507(a)(8) — to the debtor's actual assessment dates, filing dates, and conduct (including whether a return was ever filed and whether it was fraudulent). This page states what the Code says; it does not evaluate any reader's facts against it.

Learn More