Resolving Past Due IRS Debt
By: Moshe Klein, The AFFORDABLE Accounting Firm
Resolving IRS debt can be a challenging process, but there are several options available to help you manage your tax obligations. Here are some steps you can take to address your tax debt:
Pay in Full:
If you have the means to pay your tax bill in full, this is the simplest option. Paying the entire amount now helps you avoid additional interest and penalties.
Payment Plan (Installment Agreement):
If paying the full amount upfront is not feasible, consider setting up a payment plan with the IRS. This allows you to pay off your balance over time.
You can apply for an installment agreement online, and fees may apply.
Offer in Compromise (OIC):
An OIC lets you settle your tax debt for less than the total amount owed. It’s a negotiation between you and the IRS.
To see if you’re eligible for an OIC, check the IRS guidelines.
Temporary Delay of Collection:
If your financial situation prevents you from paying anything right now, you can request a temporary delay of collection.
Reach out to the IRS and explain your circumstances.
Dispute Incorrect Information:
If you believe there’s an error on your tax bill, contact the IRS. Be prepared with supporting documents (such as tax returns, cancelled checks, or other records) to explain why you think the bill is wrong.
If the IRS agrees, they’ll adjust your account and send a revised bill.
Spouse Relief:
If your spouse made errors on a joint tax return, you may qualify for tax relief. This can help if you are unaware of the mistakes.
Bankruptcy:
If you’re in bankruptcy, inform the IRS immediately. They may temporarily stop collection efforts.
Provide details such as the court location, bankruptcy date, chapter, and bankruptcy number.
Plan for Next Year:
To avoid future tax debt, pay taxes as you earn income during the year. You can do this by having your employer withhold taxes from your wages or making estimated tax payments.
Get Help:
Explore these options to get assistance:
Your Account: Set up a payment plan, view your balance, or access your transcript online.
QR Code on Your Notice: Scan the QR code on your notice for relevant information.
In-Person Help: Visit an IRS Taxpayer Assistance Center or a Low-Income Taxpayer Clinic.
Taxpayer Advocate Service: An independent organization within the IRS that helps resolve problems and protects your rights.
Third-Party Authorization: Authorize someone to contact the IRS on your behalf.
Remember that addressing tax debt promptly is essential to prevent further complications. Consider seeking professional advice.
Since 1982, Moshe Klein & Associates, Ltd. has been providing AFFORDABLE tax and bookkeeping services to small businesses and individuals in all 50 states. For a FREE & CONFIDENTIAL consultation to discuss your options, please contact our office by phone at 888-432-8187 or visit our website.