Who the IRS considers for relief payments in 2025
The IRS does not issue a single "relief payment" to everyone. Instead, the agency offers several different programs that reduce what you owe or delay when you have to pay. Which ones you may be able to use depends on your specific situation — whether you owe back taxes, whether you're having trouble paying right now, or whether you've experienced a recent hardship like a disaster or job loss.
The most common relief programs are payment plans (which let you pay over time instead of in one lump sum), Currently Not Collectible status (which pauses collection while you're in financial hardship), and Offer in Compromise (which settles your debt for less than you owe). There are also programs tied to specific events, like disaster relief for people affected by hurricanes, floods, or other declared disasters. Each program has different requirements and different processes.
This guide explains what each program does and what the IRS looks at when deciding whether you may be able to use it. It does not determine whether you will be approved — only the IRS can do that when you contact them or submit a formal request.
Key Takeaways
- The IRS offers several relief options in 2025, including payment plans, Currently Not Collectible status, and Offer in Compromise, each designed for different financial situations.
- Payment plans let you pay your tax debt over time; short-term plans are free, but long-term plans charge a setup fee and monthly interest.
- Currently Not Collectible status temporarily stops IRS collection efforts if you cannot pay due to hardship, though interest and penalties continue to grow.
- Offer in Compromise allows you to settle your debt for less than the full amount owed, but the IRS only approves it if your financial situation makes full payment unlikely.
- Disaster relief programs waive penalties and extend important date for people in federally declared disaster areas; you must contact the IRS to report your location.
Payment plans: paying your tax debt over time
A payment plan is an agreement with the IRS to pay what you owe in monthly installments instead of all at once. The IRS offers two main types: short-term plans (120 days or fewer) and long-term plans (more than 120 days).
Short-term plans have no setup fee and no monthly payment fee. You straightforward tell the IRS how much you can pay each month, and they accept it if the total reaches zero within 120 days. Long-term plans do charge a setup fee (usually between $31 and $225, depending on how you set it up) and a monthly user fee (typically $31). Interest and penalties continue to accrue on the unpaid balance, so the longer your plan runs, the more you will owe overall.
You can set up a payment plan through the IRS website, by phone, or by mail. The IRS also offers an online payment agreement tool that lets you see your options and choose a monthly payment amount before you commit. If you owe less than $50,000, you can usually set up a plan without speaking to anyone.
Currently Not Collectible status: pausing collection during hardship
Currently Not Collectible (CNC) status is a temporary pause on IRS collection activity. If the IRS places your account in CNC status, they stop sending bills, stop garnishing your wages, and stop seizing your bank accounts — but they do not forgive the debt. Interest and penalties keep growing, and the IRS can resume collection efforts later.
The IRS uses CNC status when you are in genuine financial hardship and cannot pay anything toward your tax debt right now. "Hardship" means your income barely covers basic living expenses like food, housing, utilities, and medical care. You do not have to be homeless or destitute — you just have to show that paying taxes would force you to cut back on necessities.
To request CNC status, you file Form 433-F (a short financial statement) or Form 433-A (a longer one with more detail). You can submit these by mail or through an IRS payment plan tool. The IRS reviews your income and expenses and decides whether to grant the status. CNC status is not permanent — the IRS reviews your account every two years and may lift the status if your situation improves.
Offer in Compromise: settling for less than you owe
An Offer in Compromise (OIC) is a settlement. You offer to pay the IRS a lump sum that is less than the full amount you owe, and if they accept, that payment closes your case. The IRS only approves an OIC if your financial situation makes it unlikely you will ever be able to pay the full debt.
The IRS calculates how much they think you could reasonably pay over the next five to ten years, based on your income, expenses, and assets. If that number is less than what you owe, an OIC may be possible. For example, if you owe $50,000 but the IRS calculates you could only pay $15,000 over the next five years, you might offer $15,000 to settle the whole debt.
Filing an OIC requires detailed financial paperwork — usually Form 433-A or Form 433-B (for self-employed people) — plus Form 656 (the OIC process itself). There is a filing fee (usually $225) and a monthly payment fee if you set up a payment plan as part of the settlement. The IRS takes several months to review an OIC, and they often counter with a different amount. You can negotiate, but the process is lengthy and the approval rate is not high.
Disaster relief: extended important date and penalty waivers
When the IRS declares disaster relief for a specific area, people in that area get automatic extensions on filing and payment important date, and the IRS waives certain penalties. Disaster relief has been issued for hurricanes, wildfires, floods, and other major events affecting specific counties or regions.
If you live or work in a federally declared disaster area, you may be able to postpone filing your return and paying taxes for a set period — often 60 to 120 days beyond the normal important date. The IRS also waives failure-to-file and failure-to-pay penalties for people in the disaster zone, though interest still accrues on any unpaid balance.
To claim disaster relief, you do not need to file a separate form. You straightforward file your return late (within the extended important date) and include a statement that you are claiming disaster relief. However, you should contact the IRS or check their website to confirm that your specific location is covered and to learn the exact extended important date for your area.
Penalty abatement: removing or reducing penalties
Penalty abatement means the IRS removes or reduces penalties you have been charged. Penalties are separate from the tax itself — they are extra charges the IRS adds when you file late, pay late, or make a mistake. Common penalties include the failure-to-file penalty, the failure-to-pay penalty, and the accuracy-related penalty.
The IRS has three main grounds for abating a penalty: reasonable cause (you had a good reason for the error, like a serious illness or a death in the family), first-time penalty abatement (you have not been penalized in the past three years), and statutory exceptions (certain situations where the law says the penalty should not explore).
To request penalty abatement, you can call the IRS, write a letter explaining your situation, or file Form 843 (Claim for Refund and Request for Abatement). If you are already working with the IRS on a payment plan or other relief, you can ask about penalty abatement at the same time. The IRS does not always grant abatement, but it is worth requesting if you have a legitimate reason for the error.
How to contact the IRS about relief options
You can reach the IRS by phone at 1-800-829-1040 (for individual tax matters). The IRS also has online tools on its website where you can set up a payment plan, request a transcript, or check the status of your account. If you prefer to work by mail, you can send forms and financial statements to the IRS address listed on your tax notice.
If you owe a large amount or your situation is complex, you may want to work with a tax professional — a CPA, enrolled agent, or tax attorney. These professionals can represent you before the IRS and often have faster access to IRS staff. However, you do not need a professional to request relief; you can do it yourself.
Response times vary. A payment plan can be set up in days. Currently Not Collectible status usually takes a few weeks. An Offer in Compromise can take several months. Disaster relief important date are posted on the IRS website as soon as they are declared.
Frequently Asked Questions
Will a payment plan stop the IRS from garnishing my wages or seizing my bank account?
A payment plan does not automatically stop wage garnishment or bank levies. However, once you have an active payment plan in place, the IRS typically stops collection efforts as long as you make your payments on time. If you are currently facing garnishment or levy, contact the IRS when ready to set up a plan; they may be able to release the levy once the plan is approved.
If I get Currently Not Collectible status, will my debt ever go away?
No. CNC status pauses collection, but the debt remains. Interest and penalties continue to grow. The IRS can resume collection efforts at any time, and the debt does not expire until the statute of limitations runs out — usually ten years from the date the tax was assessed, though this can be extended in certain situations.
How much does it cost to file an Offer in Compromise?
The filing fee is usually $225. However, if your household income is below 250 percent of the federal poverty line, you may be able to request a fee waiver. There is also a monthly user fee if you set up a payment plan as part of the settlement, typically $31 per month.
Can I get relief if I owe back taxes from multiple years?
Yes. Payment plans, Currently Not Collectible status, and Offer in Compromise can all explore to tax debt from multiple years. You do not have to handle each year separately. When you contact the IRS or submit a relief request, include all the years you owe.
What happens if I cannot afford the monthly payment on a payment plan?
Contact the IRS and ask to modify your plan. You can lower your monthly payment amount, though this extends how long the plan runs and increases the total interest you pay. If you are in genuine hardship, you can also request Currently Not Collectible status instead, which pauses payments temporarily.