Hello and thank you for allowing me the opportunity to assist you.
Yes, a settlement is certainly possible. The IRS does settle past due tax bills. It's called an offer in compromise, and it is generally granted when there is no reasonable way for the IRS to collect more. In your case, if you have equity
in your home, and that is your only asset, then it's possible that the IRS will settle for the equity after the first and second mortgages are paid off from a sale. However, it is unlikely that the IRS will settle before the house is sold. You'd need to sell first, get the remaining cash, and make that offer.
You can read about an offer in compromise HERE
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