I Owed $1,100 in Taxes. I've Paid Over $3,000. I Still Owe $2,700. I Think I Just Got Scammed and Taxed into Generational Trauma by the IRS

I originally owed the IRS $1,100 after filing my 2018 taxes. Since then, life has been nothing but financial hardship and health struggles. I tried to stay on top of it—I set up a payment plan, but after four months, I ran out of funds. The IRS has withheld my tax refunds every year since.

In total, I’ve already paid over $3,000 between my direct payments and withheld refunds, yet my balance has grown to $2,700 due to interest and penalties.

Over two years ago, I submitted Form 656-B to request financial hardship relief. I never even got a response—no confirmation they received it, no follow-up, nothing. But according to the IRS’s own rules, if they don’t make a determination within two years, the offer is automatically accepted. Their website explicitly states:

"Your offer is automatically accepted if the IRS doesn’t make a determination within two years of the IRS receipt date."

I just reconfirmed this on their website. My case should be closed, but here I am, still in debt, still getting hit with penalties. I’ve never tried to avoid paying. I simply never had the financial stability to do so. I haven’t made even half of what I did in 2018 since then. Holding down a job has been difficult, and my financial situation has been rough for years.

I’m honestly just sick to my stomach over this. I get that taxes are the law, but at what point is this just financial punishment for being broke? I submitted the paperwork nearly three years ago, thinking it would at least provide realistic options. Instead, I feel like I’ve just been steamrolled by interest and penalties with no way out.

The worst is behind me, and I’m trying to stay optimistic, but has anyone dealt with something like this? Do I have any options here?