It’s the start of 2025, which means that W-2s, 1099s, 1098s, and other tax forms for 2024 are starting to hit your inbox. As people begin filing their taxes, it’s not uncommon to find out that they may have used the wrong withholdings or failed to pay enough in quarterly taxes the previous year. No one wants to start the year with a big tax bill, but for many people, that’s exactly what happens.
Key takeaways
- Due date – 2024 income tax due by April 15, 2025
- Tip – File on time to minimize penalties, even if you can’t pay.
- Strategy – Be proactive about making payment arrangements with the IRS.
- Getting help – Avoid the big companies that oversell and use deceptive claims.
- Next steps – Contact the W Tax Group for guidance.
There are tax resolution options available to taxpayers, but navigating these options can be stressful. On top of that, seeking professional help isn’t even as easy as it should be. There’s no shortage of deceptive tax resolution companies that make unrealistic promises while collecting application fees from taxpayers who’ll never qualify for the programs they are promised. Keep reading to learn more about different tax resolution paths, how to find reliable tax relief companies, and how to avoid tax issues in the future, or contact us now to get help and guidance.
The Importance of Knowing Your Tax Situation
Perhaps the most important part of this entire process is starting with the right information. If you don’t have a clear picture of your tax situation, finding the right solution will be much more difficult. For example, recommendations vary based on whether you can pay over time but not immediately, if you can pay part upfront and the rest over time, or if you are unlikely to ever be able to pay.
To start with the right information, make sure you know which tax years you owe for, if you have any unfiled returns, how much you owe in total, and how much your total breaks down into original tax debt, penalties, and interest.
With that information at hand, you can start exploring the wide range of solutions provided by the IRS.
Tips for Reducing Your 2025 Tax Bill in 2024
Your 2024 income tax return and payment is due April 15, 2025. If you file an extension, your return is due October 15, 2025, but payment is still due in April. Here are some tips for keeping the total owed as low as possible:
- Consider tax avoidance strategies – Even after the end of the year, there are a few things you can do to reduce your 2024 tax liability. For example, you have until the filing deadline to put money in an IRA which can reduce your taxable income. Talk with a tax pro for more ideas.
- File on time – Filing late lead to a penalty of 5% of the unpaid tax every month. In contrast, if you file but don’t pay, the penalty is only .5%.
- Set up a payment plan ASAP – You can actually attach Form 9465 requesting a payment plan to your tax return or you can set one up online after you file. Setting up a payment plan reduces the non-payment penalty to .25%.
- Request penalty abatement – If you end up filing late or filing on time and incurring late payment penalties, consider requesting abatement. If you have a history of compliance, the IRS may remove penalties from your account.
- Compare lower interest loan options – As of Q1 2025, the IRS’s interest rate on unpaid tax is 7%. The rate updates quarterly and reflects the Federal short term rate plus three. If you can get a loan to pay the taxes for a lower rate, you may want to conside that over an IRS payment agreement.
Keep reading for a look at payment options for your 2024 tax liability or for any previous year that you owe tax.
Different Tax Resolution Options
Through the IRS, taxpayers can utilize a variety of programs to pay off their tax debt and avoid collection efforts.
Short-Term Arrangement
Will you be able to pay your 2024 tax bill quickly but just not right away in 2025? Then, you may be a perfect candidate for a short-term payment arrangement. If you owe $100,000 or less, go online and just let the IRS know that you will pay within 180 days. As long as you pay by then (around mid-October 2025), you will not face any enforced collection actions.
Installment Agreements
When to Use: You can’t pay your tax debt upfront, but you can afford monthly payments to pay off your tax debt in full or in part.
Installment agreements are the most common solution for tax debt. Most taxpayers do not have to submit any financial documentation, and in many cases, they can even get approved online without having to send in paperwork or talk to anyone directly. There are several options within this program:
- Long-term installment agreement: With this option, taxpayers spread their tax debt over as many as 72 monthly payments – more in select cases.
- Streamlined installment agreement: If you owe less than $50,000, this may be a good option for you. You do not have to provide excessive financial documentation, saving you time and effort.
- Direct debit installment agreement: Direct debit agreements withdraw payments automatically, ensuring that you do not fall out of compliance by forgetting a payment. Additionally, this type of agreement has lower application fees.
- Partial payment installment agreement: This is suitable for those who can afford to put some money toward their debt every month, but cannot pay the minimum required for a long-term installment agreement. You do have to provide financial documentation showing that your situation warrants a partial payment installment agreement.
Offer in Compromise
When to Use: You can pay some money toward your debt but will not be able to pay the full debt before the Collection Statute Expiration Date passes.
This is one of the most difficult programs to get approved for; for the 2023 tax year, just over 40% applicants were accepted. But don’t let that number deter you. Many people who sign up for installment agreements may have qualified for settlements instead. To ensure you’re selecting the best option for your situation, talk with a tax pro.
Those whose applications are approved settle their tax debt for an amount lower than what they owe, which they pay either in one lump sum or over a period as long as 24 months. You must provide an extensive financial disclosure to even be considered, as the IRS will not approve those with enough assets and income to pay their tax debt in full.
To qualify for this program, you must be able to prove that paying in full would cause significant financial hardship for your family and that your assets and income limit you to the amount in your offer.
When you see tax relief firms claiming that the IRS settles for a fraction of what taxpayers owe, this is often the program they’re referring to. Know that any firm promising this solution without a thorough look at your finances likely does not have your best interests in mind.
Currently Not Collectible
When to Use: You cannot pay anything toward your tax debt due to severe financial difficulties.
Sometimes, it’s not enough to settle your tax debt or make smaller monthly payments. For some taxpayers, any sort of payment is impossible. If you cannot currently pay anything toward your tax debt, the IRS will temporarily stop collection actions. This protects you from levies and liens for as long as you are considered not collectible. From time to time, the IRS will review your financial situation and determine whether or not they should restart collection actions.
If you consider this option, you must realize that your debt does not go away, unless the CSED passes when you are still not collectible. While you are not collectible, interest and penalties accrue.
Penalty Relief
When to Use: Penalties were added to your tax debt and you want to have them forgiven.
The IRS offers penalty relief in certain cases. You may qualify for first-time penalty relief if you have at least three years of tax compliance with no penalties assessed. Reasonable cause penalty abatement may be available to you if you have a legitimate reason for missing your tax payments—for example, severe illness, natural disasters, or the death of an immediate family member.
If you are approved for this option, you do still have to pay interest on your tax debt; only your penalties are forgiven. However, interest accrued by the penalties will be removed from your bill.
Does the IRS Really Write Off Millions in Taxes?
Anyone with tax problems has undoubtedly seen a long list of unbelievable claims from tax relief companies. Yes, some taxpayers qualify for programs that result in their tax debt being forgiven—in fact, the IRS writes off around $200 million in tax debt every year. However, qualifying for a settlement is not easy.
Check out our detailed post on this claim to learn more about the tax resolution industry and how to get real, trustworthy help.
Misleading Claims and Phrases to Watch Out For
As you look for relief from your tax debt, it can be helpful to know the most common false claims made by unethical tax resolution firms. Let’s look into these misleading claims, why they aren’t exactly reliable, and what you need to know about what they’re actually offering.
You Qualify for the IRS Fresh Start Program
- Misleading: The IRS “Fresh Start Program” refers to a series of updates the IRS made to their tax relief solutions—not an entirely separate program that you can qualify for.
- Truth: You may have tax relief solutions you qualify for, but you cannot know what you qualify for until you take a detailed look at your finances. Even with the help of a tax attorney, the final decision rests with the IRS.
- Misleading: The way this is worded makes it sound like the IRS writes off tax debt for those who haven’t requested it before—a “get out of jail free” card of sorts. This grossly oversells the penalty abatement program and how it can help taxpayers.
- Truth: The penalty abatement program does offer first-time penalty forgiveness for qualifying taxpayers. However, it applies only to the penalties assessed on your debt, not the initial debt.
Settle for Pennies on the Dollar
- Misleading: This is one of the most common claims made by these companies. It makes it sound like the offer in compromise program is quick, easy, and lets you settle for a tiny fraction of what you owe.
- Truth: Few taxpayers qualify, and of those who apply, less than half are accepted. You must have severe financial limitations to be approved.
Top 10 Tax Relief Companies
- Misleading: These lists are intentionally written to look neutral and unbiased. They aim to make taxpayers think that the companies listed have been tested and meet strict quality standards. In truth, the vast majority of these lists are filled with companies that have paid to be on them, or the research is limited to only looking at the big companies.
- Truth: These lists oversell the benefits of big companies—who can afford to pay for inclusion on the lists—and rarely include smaller local companies that offer more personalized service. When looking at a top 10 list, check out the site’s editorial standards. You’ll either see a pay-to-play scenario, a limited research pool (ie, we looked at 15 big companies and choose 10 to put on out list), or a combination of the two.
Tax Season is When They Strike—Do Your Research
Early in the year, everyone starts receiving their tax documents and running them through either their tax app or their accountant. That’s when people start getting desperate to settle their high tax bill, and that’s when unethical tax relief companies hit you hard with their advertising. Do not let your eagerness to settle your tax debt lead you to an unreliable company. Take your time, learn what to look for in a legitimate tax resolution company, and go from there.
Finding the Right Tax Resolution Company for You
You can protect yourself from the downsides of working with untrustworthy companies by knowing what to look for in a tax resolution company and only choosing one with the expertise and experience needed for your case. Use these principles to guide your search.
Legitimate Tax Professionals
Make sure that you get to work directly with a licensed tax professional at any company you choose. When you choose a CPA, enrolled agent, or tax attorney, you get access to their education and experience in this field. Additionally, they are held to strict professional standards that are described in IRS Circular 230.
How can you tell who you’ll be working with when you reach out to a company? Watch and see who you talk to first. If your first phone call is with a sales representative whose only job is to sell you on their services, that is a red flag. They won’t have the know-how to answer your questions or assess your unique tax situation. When they try to sell you on a tax solution, you have no idea of knowing whether or not you even qualify for that program. You should have the chance to talk to the person who will actually handle your case.
Realistic Outcomes and Solutions
Every tax solution has its limitations and requirements; there is no solution that works for everyone. So if a company representative tries to pitch a solution to you before they’ve even looked at your finances, that’s concerning. If they start making larger-than-life promises—for example, “settling your debt for pennies on the dollar”—you may want to look elsewhere.
You want a direct and transparent overview of your options, the advantages and disadvantages of each, and professional guidance regarding what is best for you. If a company starts pushing you to sign a contract with them and pay a deposit or fee but they can’t explain why, consider looking into other companies. This is a big decision, and you don’t need to be rushed into it by a salesperson.
A Focus on What’s Right for You
Tax law is one field where there are no one-size-fits-all solutions. The tax relief firm you choose should make recommendations tailored to your financial situation, rather than offering the same solutions they offer everyone else.
Why W Tax Group is a Trusted Option
At W Tax Group, our exclusive focus on tax law and the problems taxpayers face with the IRS makes us the right choice for your tax issues. We offer:
- Licensed professionals: Our team of enrolled agents, tax attorneys, and CPAs is ready to offer the right solution for your specific circumstances.
- A proven track record: We have a long list of happy clients who’ve experienced the happiness that comes with the right tax debt solution. Because we’ve handled all types of complex tax cases, we know what it takes to find the right option for you.
- Personalized attention: During your initial consultation, we dig into the details of your tax situation and finances to figure out exactly where you’re at in the tax collection timeline and what solutions may be well-suited to you.
- Ethical and transparent service: We won’t badger you into choosing us, make exorbitant promises, or use underhanded sales tactics. We’ll communicate with you clearly and keep you involved at all times.
Your Next Steps If You Owe the IRS in 2025
You aren’t alone! Many taxpayers find themselves in this situation at some point, which is why the IRS provides such a wide range of payment options. What matters now is how you address your tax debt and get caught up.
Don’t panic—you can manage your tax debt and still fulfill your other financial obligations with the right approach. Spend some time learning about your options so you don’t rush into a payment plan that isn’t right for you. If you see claims that seem too good to be true, trust your gut. Instead, reach out to licensed, experienced tax professionals who have the experience needed to help you.
That includes the team at W Tax Group. We are passionate about helping taxpayers tackle their tax debt head-on with solutions customized to fit their needs. Don’t fall for deceptive sales tactics as you handle your 2025 IRS tax debt. Instead, call W Tax Group at 877-500-4930 or reach out online to work with experienced tax professionals committed to delivering real solutions for you.
