Owing the IRS more than $10,000 can feel overwhelming. Whether the debt stems from back taxes, unfiled returns, penalties, or interest, it’s crucial to act quickly and strategically. Ignoring the situation can result in severe consequences like wage garnishments, bank levies, and federal tax liens. Fortunately, you’re not alone—and you do have options. This guide will walk you through the steps you should take if your tax debt exceeds $10,000 and how to regain control of your finances.

Step 1: Don’t Ignore IRS Notices

The IRS typically doesn’t make surprise moves. If they plan to garnish wages, seize property, or freeze bank accounts, they’ll usually notify you in advance. These notices come with deadlines. Ignoring them doesn’t make the problem go away—it often escalates it. Start by reading all correspondence carefully. Note the amounts owed, deadlines, and what actions the IRS may take next. If you’re unsure about the contents or implications, speak with a tax resolution professional.

Step 2: Get a Copy of Your IRS Transcript

Before making a plan, get the facts. You can request your IRS account transcript online at IRS.gov. This will show: what years you owe for, how much is owed for each year, accrued penalties and interest, any past collection activity. Knowing exactly what the IRS sees helps you avoid surprises and gives a clearer picture of your options.

Step 3: Know Your Resolution Options

If you owe over $10,000, there are several IRS programs available depending on your financial situation:

Installment Agreement – Allows you to pay your debt in manageable monthly payments. This is a common option if you have steady income.

Offer in Compromise (OIC) – Settle your tax debt for less than you owe. This is for individuals who can demonstrate that paying the full amount would create a financial hardship.

Currently Not Collectible (CNC) – If you have no ability to pay, the IRS may pause collection efforts. While interest continues to accrue, you won’t face active collection while in CNC status.

Penalty Abatement – If you have a valid reason for failing to file or pay (like serious illness or a natural disaster), you may qualify to have penalties reduced or eliminated.

Bankruptcy – Some tax debts may be discharged through Chapter 7 or Chapter 13 bankruptcy, depending on the type and age of the debt.

Step 4: Avoid Common Mistakes

Many people panic and take the wrong steps. Here are a few things to avoid: Don’t pay with a credit card unless you’re confident you can pay it off soon. IRS interest is typically lower than credit card rates. Don’t use a refund loan service that charges high fees to “settle” your tax debt quickly. Don’t wait until the IRS places a lien on your property or garnishes your wages. By then, your options may be more limited.

Step 5: Work With a Tax Resolution Professional

Even if your debt feels crushing, there may be a solution that fits your financial situation. An experienced professional will: analyze your tax records and financials, identify the best resolution strategy, communicate with the IRS on your behalf, help prevent or remove garnishments and levies. When you work with someone who understands the tax system inside and out, it greatly improves your chances of a favorable outcome.

If you’re facing over $10,000 in IRS tax debt, Accelerated Tax Resolution is here to help. Our team has decades of experience in negotiating with the IRS and finding tailored solutions for clients in difficult financial positions. Call now for a free consultation and take the first step toward peace of mind.