The MacGruber actor will star in the forthcoming indie western The First Ride of Wyatt Earp, reports Variety.
The film will tell the true story of Earp's first ride as a marshal to track the individual who murdered a woman.
Mike Feifer is directing the project, dubbed a "Young Guns for the next generation", from a script by Darren Benjamin Shepherd.
Production has already begun in California.
Kilmer previously played Doc Holiday in the 1993 western Tombstone, which starred Kurt Russell as Earp.
The IRS put a lien on Kilmer's New Mexico home last December after it was reported that the actor owed the government almost $500,000 (£325,650) in unpaid federal taxes.
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