Welcome to Just Answer. I am here to help you resolve your tax and finance concerns. Please feel free to ask anytime you need extra help.
New expert here.
Here is how I would recommend that you proceed:
1.Recognizing that the IRS has a 10 year statute of limitations and that they will permit you to live at the preposterous income after they take from your earnings, 150% of the poverty level for your household size and region, determine how much that is. You will need to do a bit of research on the poverty level for your region.
2.Compare that allowable "living income" to your present income. We will call the remainder a "payable income" and this should be computed on a monthly basis. If this, over 10 years (120 months) will pay off the majority of the tax debt that is the minimum the IRS will accept for an Offer In Compromise. They do not care that you may need to make serious lifestyle changes. It is just not viewed as their problem.
3.Look at your assets. If the IRS determines there is a substantial net worth to be seized they will be willing to do this if other arrangements are not made.
4.Once the above review of your personal life has been made file the returns and begin the Offer In Compromise forms for submission. The IRS cannot compromise any tax debt until the returns are filed and the debt is recorded by them. I will provide a link to an IRS page about the Offer In Compromise program after my remarks.
Remember that a payment plan is better than an Offer In Compromise and that the shorter the period of the payment plan the better. You will also be asked to substantiate that you are taking steps to prevent this problem from happening again. As you go through the material and prepare the forms please feel free to return if you need additional assistance. My next post will include material on both payment plans and offers in compromise.