Here are your payment options for unpaid taxes with the IRS

amircudic | E+ | Getty Images

1. Installment agreements

If you cannot afford to cover your entire balance, you can request an installment agreementa long-term monthly payment plan.

You may qualify if you owe $50,000 or less, including taxes, penalties, and interest, and the IRS will not approve the plan with unfiled returns.

Of course, you’ll want to accept an affordable monthly payment, and you’ll need to pay future taxes on time to avoid defaulting on your agreement, the Taxpayer’s Advocate Warns.

“It’s a very quick process,” Collins said, explaining that you can apply online, by phone or through a bot.

2. Offer in Compromise

Another option, known as offer in compromise, can allow you to settle for less than you owe. However, the IRS encourages taxpayers to explore “all other payment options” first.

“If you can show that you’re in financial difficulty, you may be able to reduce the liability and settle it permanently to put the tax behind you so you can move forward,” Collins said.

To qualify, you must be current on all returns, unless there is a valid extension on file, and current with estimated tax payments required.

You can use the Offer in Compromise Pre-Qualification Tool to assess your eligibility and submit an application from Offer in compromise booklet.

3. Currently not collectible

There is also a “currently uncollectible” statuswhere the IRS can waive trying to collect outstanding balances for a period of time, Collins explained.

However, if approved, your unpaid debt may still incur penalties and interest, and the IRS may use your future repayments to cover the balance. according to the taxpayers’ advocate. And you’ll need to keep track of your future taxes.

To qualify, you may need to file outstanding returns, as well as Form 433-A, Form 433-F Where Form 433-B and other documents, to prove your financial hardship and inability to pay.

Disclaimer! Verve Times is an automatic aggregator of all the media in the world. In each content, the hyperlink to the main source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the content owner and do not want us to publish your materials, please contact us by email – [email protected]. Content will be deleted within 24 hours.

Source link

Elaine R. Knight