Tax Debt Options Checklist

Step 1: Gather what the IRS sent (without sharing documents)

Start by locating any IRS notices, letters, or bills you received. If you have multiple notices, put them in date order.

Write down the notice type and date (for example: “CP___,” “LT___,” “Letter 1058,” or “audit letter”). If you don’t have the letter handy, you can still describe the general issue in your own words.

Important: TaxCairn is a free matching service, not a law firm. We do not collect SSNs, ITINs, tax returns, financial account numbers, or immigration documents. When you reach out, you only provide general contact and situation details.

Step 2: Identify the tax problem in plain language

Tax “debt” can come from different issues. In your notes, check which description fits (you can choose more than one):

• You owe income tax from a prior year (back taxes)
• You did not file one or more years
• You received an IRS bill that says you have penalties and interest
• You were selected for an audit or additional review

If you are not sure, that’s okay. A professional can help you interpret the notice. Your goal now is to describe what happened as clearly as you can.

Step 3: Make a simple list of tax years involved

Create a list of the tax years mentioned in your IRS letters (for example: 2021, 2022, 2023). If a notice covers multiple years, write them all.

If you have unfiled years, note which ones you think are missing. If you’re unsure, write “unknown” for now—starting with a rough list is better than waiting.

This helps you talk to a professional faster because tax solutions often depend on which years are filed, which are not, and whether the issue is a bill, a notice, or an audit.

Step 4: Check the “collection status” (what the IRS is trying to do)

Some IRS problems are about future payment plans. Others involve the IRS taking action to collect. In your notes, look for terms like lien and levy.

• Lien — a legal claim the IRS puts on your property (it can affect selling or refinancing)
• Levy — when the IRS actually takes money or property (for example, from a bank or wages)

If your notice mentions wage garnishment or bank levy, write that down. If it does not, still describe any deadlines and what action the letter requests.

Step 5: List your current ability to pay (no numbers required)

You don’t need to send financial documents to use this checklist. For your own planning, write short answers like:

• “I can pay something monthly.”
• “I can’t pay in full right now.”
• “My income changed recently.”
• “I have job income, self-employment, or mostly irregular income.”

If you are already paying through an agreement, write “existing plan” and the month started (if you know). This helps a professional discuss options such as installment agreements or other resolution routes.

Step 6: Understand common resolution options (so you can ask better questions)

You don’t need to choose an option yet. Use these plain-language descriptions to guide your conversation with a professional:

• Installment agreement — a payment plan with monthly payments.
• Offer in Compromise — a request to settle for less than the full amount if the IRS rules and your situation support it.
• Penalty relief — requesting a reduction or removal of certain penalties in limited situations.
• Currently Not Collectible (CNC) — a status where the IRS generally pauses collection because you can’t pay right now (interest may still continue).

Typical professional help for many tax debt cases is often in the range of about $1,500–$5,000 flat fee, and complex cases can cost more. Installment agreements can start around roughly $25/month depending on the situation. An Offer in Compromise application fee is often a few hundred dollars unless it qualifies for a waiver. Exact numbers vary a lot by case, state, and firm.

Be cautious of anyone who guarantees a specific result or promises the IRS will accept “pennies on the dollar.”

Step 7: Filing is separate from immigration status

If you are an immigrant or you use an ITIN, you may still have legitimate options to file and resolve tax issues. Filing a tax return and resolving tax debt is separate from immigration status.

In your notes, write whether you have filed for all required years, or if you believe some years are missing. If you received an ITIN and are unsure how it affects your tax paperwork, a qualified professional can explain the process.

If your goal is to reduce stress and move forward, focus on organizing the “what” and “when” from your IRS letters first—then get a second opinion if you feel stuck.

Step 8: Prepare the questions you’ll ask a professional

When you contact a tax-resolution professional, clear questions help you understand next steps. Consider writing these down:

• “What type of problem is this based on my IRS letter?”
• “Are there deadlines I must respond to?”
• “Do I need to file missing returns before we resolve the debt?”
• “What collection actions should I expect, and how can I reduce the risk of a levy?”
• “What options fit my situation (installment agreement, CNC, Offer in Compromise, penalty relief)?”
• “What is your estimated flat fee for representation, and what does it include?”

TaxCairn is a free matching service. Participating professionals pay a flat fee to be matched, so you can start the process without worrying about matching fees. To get started, you can visit /get-matched/.