Navigating IRS Tax Forgiveness Options

With tax season in full swing, many Americans may find themselves overwhelmed and unsure how to navigate the path to financial relief.

Jason Wiggam, founding partner at Atlanta-based Wiggam Law, specializes in helping individuals and businesses resolve tax disputes and understand their options when dealing with the IRS and state taxing authorities.

Wiggam warns that owing back taxes to the IRS can quickly escalate into a much larger financial problem.

“When taxpayers owe back taxes to the IRS, the consequences can be severe and grow worse over time,” he says. “The IRS charges hefty penalties and interest, making the tax debt balloon quickly. Currently, the IRS interest rate is 7%, and they tack on a late payment penalty of 0.5% per month, which can accumulate up to 25% of the unpaid tax liability.”

He notes that if unpaid taxes remain unresolved, the IRS may take more aggressive enforcement measures — including filing federal tax liens, garnishing wages, seizing tax refunds, or levying bank accounts and property, severely impacting creditworthiness. Wiggam recommends not waiting to act.

“Taxpayers should seriously consider applying for tax forgiveness as soon as they realize they cannot repay their tax debt in full,” he says. “Its especially critical if they are struggling to make payments or if the IRS has already begun enforcement actions. Waiting too long only makes the situation worse.”

So who qualifies for IRS tax forgiveness?

“To qualify for tax relief, taxpayers must be current with their tax obligations,” Wiggam says. That includes filing all required returns — typically the past six years — and staying up to date on current tax payments, either through paycheck withholdings or estimated payments.

He notes that a taxpayers financial situation also plays a key role in determining eligibility.

“If taxpayers have significant assets or high income, their options may be limited to payment plans or penalty abatement rather than more comprehensive forgiveness programs,” he says.

For those who are unable to pay in full but don’t qualify for forgiveness, potential options include installment agreements. Wiggam urges taxpayers to consult a professional if theyre unsure how to proceed.