What is the best solution to solving my tax debt when you can’t pay?

What does your bankruptcy attorney recommend? The IRS has a new streamlined installment agreement plan in place for taxpayers owing less than $50,000.

File a request for an installment payment agreement (to allow you to pay over time) or an offer in compromise (to pay less than the amount owed). Either of them uses a formula to determine how much you need to live on and then requires you to pay the excess to the IRS. The offer in compromise requires you to pay what is essentially your net worth plus sixty months worth of the difference between what you make and the allowable expenses; this almost always requires you to borrow from a friendly party. The IRS also accepts only a small percentage of offers in compromise that it receives. In some circumstances, you can get them to put you on uncollectible status which stops there collection activities for a while but does not reduce the tax owed.