Paying the full amount of tax debt as soon as possible is always the least expensive option for the taxpayer because of penalties and interest accumulation.
In 2016, the Internal Revenue Service (IRS) began a new private collection program of certain overdue federal tax debts.
The new program authorized designated contractors to collect, on the government's behalf, outstanding inactive tax receivables.
[citation needed] By an offer in compromise, taxpayers lacking the means to repay taxes may negotiate a lesser settlement with the IRS.
Other, more severe consequences are losing ground on one's credit report, having one's property seized, declaring bankruptcy, and serving jail time.