Is there a way to have the IRS reduce penaties & interest on back taxes due to extreme hardships?

After getting laidoff from a 50K a year job, having a heartattack, cancer, getting divorced and, not 1, not 2, but 3 hurricances and loosing the roof and all goods. The IRS still wants thousands. HELP!

Public Comments

1. Sure, but it's not likely, and it will probably cost you almost as much in attorney's fees. Why is it that you didn't pay your taxes to begin with?
2. I've seen commercials for attorneys how handle this kind of stuff but I don't really think that's fair. if I have to pay my taxes when I can't really afford it everyone else should, too. I agree with the first person who answered... why didn't you pay them in the first place? Why wait so long that you have interest and penalities?
3. You can negotiate with the IRS. They know they cannot get blood from a turnip. Tax Defenders Network might be able to help you.
4. Call the 800 number to the IRS and explain your situation. Tell them you would like to work out a payment plan and ask if there's any way they can reduce the penalties and interest so you can afford to work with them. I owed quite a bit one year and they put a lien on my house, charged me 10% interest (this was several years ago when interest rates were higher) and let me make payments. I don't know if they will reduce your penalties and interest or not but it doesn't hurt to ask.
5. Ask to talk to the tax payer advocate. Yes you can negotiate and no you don't need a lawyer. You often hear about the IRS getting pennies on the dollar for a settlement. It really helps if your description is accurate and you didn't have any hanky-panky going on as well.
6. I am an enrolled agent, licensed by the Treasury Department to represent taxpayers (the same as attorneys and CPAs.) I specialize in clients with back tax debts. IRS will not reduce penalties and interest because of hardship. If IRS determines you are unable to pay what you owe right now because of hardship, your account can be temporarily reported as not collectible. If your situation improves, the account is resurrected with additional late payment penalty and interest. If it agrees that it is unlikely that you will ever be able to pay what you owe, IRS will accept less than 100 cents on the dollar if you file an offer in compromise. This is the "pennies on the dollar" deal you may have seen on cable TV commercials. To get one of these accepted, you have to offer an amount that represents, in IRS jargon, the reasonable collection potential of the account. If you would like more details privately, you can send me email by clicking through my profile.