IRS tax debt settlement as soon as possible is essential if you wish to escape harsh penalties and ever accumulating interest rates. IRS tax debt settlement is a situation where an individual and/or his or her lawyer work with the IRS to arrange a hopefully mutually beneficial arrangement. In this settlement, the IRS receives monies and/or promises of back and current taxes owed. The individual receives time in which to pay the taxes. In some instances, the settlement will involve partial payments. An installment agreement will set monthly payments. If there is hardship a temporary delay may be agreed upon. An IRS debt settlement is means to resolve the tax debt as quickly and as painlessly as possible. An agreement may involve an extension of within 60 to 120 days - providing the amount is paid in full. An individual may also arrange for an Offer in Compromise. Another form of IRS tax debt settlement is penalty abatement. This will not necessarily remove the entire amount of penalty owing but it may reduce it.