On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (H.R.1), hailed as the “largest tax cuts in history.” Yet while it locks in expanded SALT deductions, higher standard deductions, and boosted child credits, none of those changes erase your existing IRS debt; back taxes, penalties, and interest continue to accrue.
This Act extends and expands several provisions from the 2017 Tax Cuts and Jobs Act, including:
- Expanded SALT Deduction: The State and Local Tax (SALT) deduction cap is raised to $40,000 (with a phase-down for incomes over $500K).
- Boosted Child Tax Credit: Increased to $2,200 per child.
- Permanent Pass-Through Deduction (QBI): The Qualified Business Income deduction is made permanent.
- First $25,000 of Tip Money Tax-Free: A new rule suggests the first $25,000 of tip income could be exempt from taxes.
- First $12,500 of Overtime Money Tax-Free: The first $12,500 of qualified overtime income is deductible from federal taxable income between 2025 and 2028, but it remains subject to payroll and other applicable taxes.
- Extra $6,000 Exemption for Seniors: For individuals aged 65 and older, the bill adds an extra $6,000 tax exemption, though Social Security income remains taxable.
These changes are designed to provide future tax benefits for many Americans.
Why Your Back Taxes Are Not Forgiven by This Bill
Despite the positive headlines, the most important message for anyone with existing tax debt is this:
- Existing Debt Remains: Back-due income taxes, payroll taxes, self-employment taxes, and any associated penalties and interest continue to accrue.
- IRS Enforcement Can Continue: The IRS can still pursue collection actions like wage garnishments, bank levies, and federal tax liens for unresolved balances.
- Why You Cannot Rely on Headlines Alone: Social media and news snippets often oversimplify complex tax legislation. Misinterpretations can lead to dangerous complacency, allowing your tax situation to spiral further. Proactive, professional action is the only path to true relief.
Your Current Reality: When Messy Books Lead to Tax Stress
“My Records Are a Disaster! Can I Still Get Help?”
If you are a small business owner or freelancer, the thought of tackling disorganized, out-of-date, or inaccurate financial records can be paralyzing. You might feel like your books are a complete disaster, making it impossible to even think about addressing your taxes. We hear this often, and we want to reassure you: you are not alone, and yes, you can absolutely get help. Many of our most successful cases started with clients feeling exactly this way. Our expertise lies in transforming that chaos into clarity.
The Shifting Landscape: Why More People Are Struggling (and What It Means for You)
Beyond the personal stress of messy books, the broader tax environment presents new challenges. More people are finding themselves in difficult tax situations with unpaid bills. The number of individuals with unpaid taxes has significantly increased over the last three years. Adding to this, the IRS is expected to face challenges with service quality and longer wait times due to budget cuts and reduced staff. This means navigating tax issues on your own is becoming even harder.
The Hidden Costs of Unaddressed Tax Debt
Beyond the obvious financial penalties and potential IRS enforcement actions (like levies and liens), unaddressed tax debt carries a significant emotional toll. The constant worry, the fear of the unknown, and the feeling of losing control can impact your health, your business, and your peace of mind. Our goal is to alleviate not just the financial burden, but also the immense stress that comes with it.
Proven IRS Debt Relief Options
Even though the “One Big Beautiful Bill Act” does not address past debt, several powerful IRS programs can provide significant relief. These are the strategies PrecisionTax specializes in:
Offer in Compromise (OIC)
An Offer in Compromise (OIC) allows certain taxpayers to settle their tax debt with the IRS for a lower amount than what they originally owed. This is typically an option when you can demonstrate a genuine inability to pay the full balance due to your income, assets, and expenses. A successful Offer in Compromise can significantly reduce your total IRS debt, but penalties and interest may continue to accrue until the IRS accepts the offer and all terms are fully met. Crucially, accurate and up-to-date financial records are paramount for OIC approval.
Installment Agreements
If an OIC is not the right fit, an Installment Agreement allows you to break your total tax balance into manageable monthly payments over a set period. This is available to most taxpayers and can help break a tax balance into manageable monthly payments, but IRS collection actions such as liens or levies may continue unless the agreement is approved and the taxpayer remains fully compliant.
Penalty Abatement
The IRS often applies penalties for late filing or payment. If you can demonstrate “reasonable cause” (such as illness, natural disaster, or other unavoidable circumstances) for your non-compliance, you may qualify for Penalty Abatement. Penalty abatement can reduce or eliminate IRS penalties for late filing or payment, which often make up a significant portion of a taxpayer’s total debt, depending on the circumstances.
Your Financial Freedom Starts Here
The “One Big Beautiful Bill Act” is a significant piece of legislation, but it does not provide a magic solution for your existing tax debt. Your back taxes, penalties, and interest remain.
However, even with these challenges, you are not without hope, and more importantly, you are not without solutions. A clear, actionable path to relief exists, even if your financial records are a mess. At PrecisionTax Relief, we specialize in transforming that overwhelm into clarity, providing expert bookkeeping cleanup and proven IRS debt resolution strategies.
Ready to resolve your tax debt?