While taxes are something you deal with every year, they can still fall to the wayside. Either that, or events beyond your control can cause your tax bill to skyrocket out of your financial hands. Either way, you may need tax relief help from us here at Five Star. First, let’s break down just what tax relief is.

Tax Relief Table Of Contents

  • Understanding Tax Relief

  • Qualifying for Tax Relief

  • Benefits of Tax Relief & How to Pay Off Owed Taxes

  • Tax Relief in a Natural Disaster Situation

  • Overview of our Tax Relief Services

  • Frequently Asked Tax Relief Questions

How Does Tax Relief Work?

Essentially, tax relief is a set of incentives and programs designed by the IRS to lower a taxpayer or business owner’s tax bill. Examples include tax credits and other temporary incentives, allowable deductions for pension contributions, tax forgiveness, and the removal of any tax liens. Your specific tax situation will determine the best form of tax relief for you. It’s important to bear in mind that the IRS does not openly promote tax relief. That’s why it’s good to seek out a reputable tax service to explore your tax relief options and determine which is best for you.

What Qualifies You for Tax Relief?

Trying to catch up on your IRS payments can leave you in a financial crunch and cause a great deal of stress. Besides an unexpectedly high tax bill, a natural disaster may have recently swept through your area, making it challenging for you to successfully file your taxes and pay your tax bill. You may also be going through a financial hardship, which can allow you to qualify for relief. There are many different situations that could qualify you for tax relief.

The Benefit Tax Relief Help Provides

Sure, IRS tax relief can lower your tax bill, but let’s dive a bit deeper into its benefits. If you’re unable to pay your tax bill in full, the IRS can garnish your wages. You work hard for every penny you make, and having the IRS cut into your income can throw your budget, financial health, savings plans, retirement, and more out of whack. With tax relief services, you can put a stop to garnishments—getting the IRS out of your hair and bringing balance to your financial life.

It may be that instead of garnishing your wages, the IRS goes straight for the financial jugular and hits you with a bank levy. When that happens, the IRS siphons funds directly from your bank account. You may log into your account and discover your funds have been frozen and money sent to the IRS. Worse, you could discover this while trying to make a purchase with your debit card, leaving you in quite the bind. Tax relief works to take care of the bank levy so you can bank, swipe, and spend without worry.

How to Pay Off Back Taxes?

Not many things in life can be more stressful than owing the IRS money—especially when you don’t have it on hand. Fortunately, you have a few options when this happens, and this guide covers the different tax relief payment options. It becomes a matter of determining what’s best for your personal situation.

Taxes Can Snowball Quickly

Keep in mind that tax amounts can get out of hand quickly if you procrastinate. The IRS will tack on penalties and interest to your outstanding balance.

Let’s say you owe the IRS $30,000 for your last two years’ tax returns. You consider amending one or both to take advantage of deductions you might have overlooked. That’s a good first step, but late penalties and interest are piling on while you debate this option and finally get around to filing the new returns.

You might shave a little off your tax amount by amending, but the interest and penalties assessed by the IRS might offset any savings. It may benefit you more to address the total balance first. Adjustments can always be made later if it turns out you don’t owe as much.

Consider an Installment Agreement

The IRS will approve an installment agreement to settle the amount owed if the taxpayer has filed all tax returns for the last five years and the total balance for all years is less than or equal to $50,000.

You would qualify for a streamlined installment agreement if your balance due is $30,000. “Streamlined” means the IRS won’t ask about your current financial situation. You’ll have fewer forms to fill out.

Had you owed less than $10,000, you would qualify for a guaranteed installment agreement payable over three years.

A streamlined agreement typically gives you up to six years.

Minimum Tax Payments

This agreement depends on your ability to pay a minimum of about $415 per month: your total tax amount divided by 72 months. You can always pay more, but you can never pay less than the agreed amount.

You could set up an installment agreement for $450 or $515 per month, as long as it meets the $415 minimum. It’s often advisable to set your agreement for the minimum the IRS will accept, then pay extra when you’re able.

What If You Can’t Afford the Minimum?

If you can’t manage the minimum, you’ll need to contact the IRS to request a different arrangement. This requires submitting Form 9465 (not applying online) and a full financial review.

The IRS will want to know:

  • How much you could pay by liquidating assets

  • Whether you can borrow funds via credit cards or home equity

  • How much monthly income remains after covering essential living expenses

Not Every Expense Will Count

Let’s say you earn $4,600 monthly and spend $4,350 on living costs, leaving $250. The IRS sees that leftover amount as what you can pay monthly. However, it may exclude certain expenses it deems unnecessary or excessive.

Example: You spend $250 a month on a premium streaming package. The IRS may disallow this and redirect part of it toward your tax payment.

Necessary Expenses

According to the IRS, necessary expenses are those needed for your family’s health, welfare, or income production. These include:

  • Food, clothing, housekeeping, and personal care

  • Housing and utilities (rent, property tax, water, electric, etc.)

  • Transportation costs (car payments, fuel, public transit)

  • Health insurance and medical expenses

  • Childcare

  • Term life insurance

  • Current-year estimated taxes and withholding

  • Past-due state/local tax installments

  • Other costs shown to be essential

Collection Financial Standards

The IRS will compare your actual expenses to regional averages. These are known as Collection Financial Standards. If your mortgage is $3,000 but the regional standard is $1,500, they’ll likely add $1,500 back to your available income.

If you can’t repay your full balance within 72 months, the IRS will also verify your financials—bank statements, pay stubs, etc.

Other Options

If you can’t afford what the IRS demands, you still have choices:

  • Sell assets to generate funds

  • Take a loan or use credit cards

  • Request an Offer in Compromise (a reduced payoff amount)

  • Ask for deferment until your financial situation improves

Sometimes, the best path is a combination. Learn more about available IRS payment plans.

Tax Relief in a Natural Disaster

If a federally declared disaster (like a hurricane or flood) affects your area, the IRS may automatically extend your deadline and allow you to pay any outstanding taxes later. You’re usually eligible if you live or operate a business in the affected zone. Some property losses not covered by insurance may also be deductible. See the IRS site for details on disaster-related tax relief programs.

An Overview of Our Tax Relief Services

Wage Garnishment

The IRS can garnish wages if you have unpaid tax balances. After sending notices, they can issue a federal tax levy to your employer. This reduces your paycheck to cover taxes owed.

Delinquent Tax Returns

Late or unfiled returns are considered delinquent. The IRS accepts returns going back six years, but late fees and interest will apply.

Tax Liens

The IRS can file a lien against your property or assets. They can also claim passive income from those assets toward your balance.

Tax Levies

Levies allow the IRS to seize wages, homes, cars, retirement accounts, and more. It’s critical to respond to IRS notices early.

First-Time Penalty Abatement

If it’s your first time owing taxes, you may qualify to have penalties and interest reduced or waived.

Offer in Compromise

If you’re experiencing hardship, the IRS may agree to settle your tax obligation for less than the full amount owed.

Partial Payment Installment Agreement

You may qualify to make reduced monthly payments over time instead of paying your full balance upfront.

Currently Non-Collectible

If you’re in severe financial distress, the IRS may pause all collection activity until your situation improves.

Innocent Spouse Relief

If a joint return includes errors made by your spouse, the IRS may relieve you of associated penalties or balances.

Injured Spouse

If one spouse’s refund is applied to the other’s unpaid taxes, you can request your portion be returned to you.

Penalty Abatement

If life events caused you to fall behind on taxes, you may qualify to have penalties and interest reduced.

Frequently Asked Tax Relief Questions

What is tax relief?

Tax relief includes a wide range of IRS and state programs to reduce tax obligations, such as penalty abatement and payment plans. Relief applies to individuals and businesses alike.

How do you avoid IRS tax relief scams?

Beware of companies that:

  • Skip financial analysis

  • Aren’t transparent about fees

  • Demand full payment upfront

  • Guarantee outcomes without review

Can you be arrested for owing taxes?

No, owing taxes does not lead to jail time. Only tax fraud or evasion carries that risk.

What can the IRS seize?

Nearly any asset in your name—cars, homes, retirement funds, and even inheritances once distributed—can be levied to cover unpaid taxes.

Can back taxes hurt your credit score?

Owing taxes doesn’t directly affect your credit score, but financial strain can impact your ability to pay other bills, which could lower your score.

How do you know how much you owe?

The IRS sends notices detailing your balance, including interest and penalties. If you’re unsure, we can help determine the total.

How far back can the IRS collect taxes?

Generally, the IRS can collect for up to 10 years from when taxes were assessed.

How far back can I file returns?

You can typically file back six years of returns to regain good standing and claim any refunds.

Can owing taxes delay my refund?

Yes. If you owe, your refund can be delayed or applied to your existing balance.

How long does tax relief take?

It varies based on your situation and how quickly you provide documentation—anywhere from a week to several months.

Can I do this myself?

You can, but the process is complex. We’re here to help you avoid costly mistakes and get the best possible outcome.

Can you help me if I’m not local?

Yes—we serve clients nationwide through phone, email, and fax. In fact, remote services can often be more affordable.