Have a Tax Question? Ask a Tax Expert
If you are asking if the IRS will renegotiate your current Installment Agreement because you have been terminated form your job, yes they can.You will be required to complete another income and asset statement to show the reduced income you have now.
The best action to take would be to contact them (number on your last statement) and let the agent know what has happened.
The IRS specifically advises:We have several options available if your ability to pay has changed and you are unable to make payments on your installment agreement or your offer in compromise agreement with the IRS. Call the IRS immediately at 1-***-***-****. Options could include reducing the monthly payment to reflect your current financial condition. You may be asked to provide proof of changes in your financial situation so have that information available when you call.
If you are asking about an Offer in Compromise instead, yes. An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can't pay your full tax liability, or doing so creates a financial hardship.
You must be current with all filing and payment requirements so you would not want to miss an Installment payment. You are not eligible if you are in an open bankruptcy proceeding. Use the Offer in Compromise Pre-Qualifier to confirm your eligibility and prepare a preliminary proposal.