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Yes, there absolutely is. This is not just the cloth of urban myth. It happens over and over through the use of a system that the menacing Internal Revenue Service, themselves, has come up with to assist hooligan tax payers settle back taxes. The program is known as an "Offer in Compromise", or more succinctly an "OIC". The IRS has been known to consent to as little as one (yes that's right, the figure "1") per cent of an total to be paid on a tax debt and call it settled.
These OIC's are totally up to the government's judgement, as there is no lawful right to have a valid tax balance diminished by the IRS. That being said, the IRS must give a correctly presented Offer appropriate judgment.
Consider the case of Henry who was living on a fixed income and discovered himself in arrears to the IRS for the sum of $13000. That's because a back tax bill can grow at a fast rate with all the additional fees, penalties and interest that they assign to it. These things take on a life of their own after a while. Henry did the smart thing and enlisted the help of a commissioned agent to represent his case to the IRS. The commissioned agent wrangled a huge reduction from the full amount of $13000, getting it whittled down to a manageable $2000! This was an amount that Henry could be able to to repay and get back to his life without the IRS haunting him.
If this OIC thing is starting to sound like it could be the way for you, keep in mind that merely wanting to negotiate a deal with the IRS is not adequate of a condition. After all, wouldn't every person like to have his or her tax debt abated? You first have to be eligible for an Offer in Compromise by showing the IRS that one of the following conditions exist:
What the IRS calls "Doubt as to Collectiblity". Simply put there is some qualm as to whether they can make a collection of the debt from you.
"Doubt as to Liability". There is some rational reservation as to whether you owe the tax bill at all. This one is highly a long shot at best.
Lastly, due to some mitigating circumstances, the payment of the full tax bill would cause you an economic hardship or would be unfair or unjust.
The bottom line here is if you think you might qualify for one of these tantalizing reductions in your delinquent tax debt, you should get professional help in making the judgement, and if a good basis exists, engage them to represent you before the IRS. This is not anything you want to do on your own. The maxim from the law profession " he who acts as his own attorney has a fool for a client" would also hold good in going before the Internal Revenue Service with an Offer in Compromise.
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