Question: It’s gotten to the point that my taxes are literally out of control. On advice I’d heard a long time ago. I’ve continued to file my taxes but have not paid them for five years. I always figured I’d catch up and reconcile with the IRS. Well, I haven’t caught up, but I’d still like to reconcile. What can I do? I owe $98,500. But I’m lucky to have $4,000 in liquid assets – assuming I sell my car.

Answer: Whoever gave you that advice early on was a smart man. Not filing a personal income tax return is a criminal offense. Even though you did not have the money to pay your tax debt, your filing year after year may be the reason you’re not behind bars right now.

Your situation seems extreme, but not at all uncommon. In fact, 26.3 million Americans owe money in back taxes. While the IRS does get a bad rep for being an aggressive, sometimes unfriendly agency, the rap is generally underserved. Most IRS agents are more than happy to work with taxpayers in difficult situations such as yours.

The first thing you should do is consult with a qualified tax professional. Since it sounds like you were doing your own taxes, the first step a tax professional will take is to examine your filings with a fine-toothed comb. This procedure will often reduce your tax debt by thousands of dollars. After all, you don’t want to pay the IRS anything more than you owe.

At that point, you and your tax professional will meet with the IRS and present what’s called an Offer in Compromise. In this procedure, you tell the federal government with assets you have, what your current earning potential is, and how much of your tax debt you can reasonably pay. In many cases, people who present an Offer in Compromise reduce their tax debt by pennies on the dollar, meaning that $98,500 tax debt will shrink to an amount you can reasonably pay.