Taking everything at face value in your blog post - You can pay at 18% interest
OR
you can sell and walk away with $30,000.
Then use the 30,000 to pay off debt.
Just by selling, you will have eliminated the property tax debt, the HELOC, the car note, all of the credit cards, and, if I am correct, be left with no debt but your mortgage and the $40k to the IRS.
Is that right?
I know which way I would go. In one fell swoop, you will have eliminated ALL of those monthly recurring obligations. The $535 to the property tax lien holder. The $670 you already did (lunches and massages). The $393 to the car . . . are you adding this up? By the way, once you payoff the car, you can reduce the insurance on it and save monthly there, too ($135 a month for insurance is insane). Plus the $850 monthly on credit cards and furniture debt. Plus the monthly payment on the HELOC ($135???). How much a month is that, total? Start setting it aside each month, stockpiling cash to workout your IRS issue. Then start saving for real.
This, x1000.
I know I've been talking about repayment plans and all that, because Beatles really seemed to want to keep the rental (while disagreeing strongly that he should).
But what Malum Prohibitum points about above is really the simplest, quickest solution. It wipes out everything but the IRS debt, and then the "snowball" (and any other funds that can be freed up by economizing) can be applied to that. Keeps it simple, gets creditors off your back, and puts an end to the insane interest charges that will keep mounting.
Just wanted to address one other question, by the way.
Beatles, you mention in your blog that it's $595 per month profit on the rental. Is this $595 month/$7140 year net of property taxes (and insurance if you could get it), or is it just the gross profit?
If you have to pay ~$3500 year in taxes, and should be paying another ~$500 in insurance, that's $4000 of expenses that eat in to that $7140 gross profit. Set aside another $100 month (too low, but for the sake of example) for maintenance, and you have $5200 of expenses. So your true net profit would be $1940/year, or just $161/month.
You are taking on a LOT of risk to keep the rental for what amounts to a very small rate of return on your investment.
I'm not now and have never been a landlord, so I'll let others with more experience correct/amend what I've said above, but to my admittedly inexperienced eyes, it doesn't look like you're getting much bang for your buck, and the bang you're getting comes with way too much risk. When selling comes with so many other benefits, I can't see my way clear to advise you to hang on to it.
By the way: I love the new avatar, and the links in your signature to the blog where you spell out some of the details you aren't mentioning here. Putting together the info in the blog will greatly help you, and it will also greatly help the community here to give more detailed and specific advice.
Keep going! You can do this!