If you cannot fully pay off your tax debt due to financial hardship, and you will not be able to pay it off over the number of years the IRS has to collect, you may be able to make an offer-in-compromise instead. This is essentially a lump-sum amount negotiated between you and the IRS, which will satisfy the tax debt for a payment lower than the actual total owed. You must demonstrate financial hardship and be prepared to make the payment soon after the negotiations are complete, but it’s a very good option for taxpayers who have large or multi-tax-year debt and are motivated to resolve it quickly.

Once your offer-in-compromise has been accepted and you make your one-time payment, your tax debt is considered paid-in-full and no further IRS collection activity will occur.