Every year millions of taxpayers find out that instead of receiving a refund they owe the IRS even more tax. If you are unable to pay your tax bill there are options available to resolve the balance due. Lets take a minute to look at five options.
First, you could do nothing. Eventually the IRS will file a tax lien, levy your bank account, and garnish your wages. As you can guess, this isn’t a good option.
Second, you can request a one-time 120 day hold. Penalties and interest continue to accrue, but if you just need a couple months to come up with the money, then the IRS will grant you a one time 120 day hold to pay your taxes.
Third, if you need more than 120 days to pay your tax bill then an Installment Agreement might to be the solution. An Installment Agreement allows you to make a monthly payment to the IRS for up to 84 months. If your balance is less than $50,000 then you can even avoid a tax lien.
Fourth, Currently Not Collectible Status is like an installment agreement without the monthly payment. You’ll have to convince the IRS you can’t pay anything and they will file tax lien, but you’ll avoid bank levies and wage garnishments.
Lastly, an Offer in Compromise allows you to settle your debt for less than the full amount due. If you qualify, then you can save thousands of dollars and resolve the balance due within months rather than years. Keep in mind, not everyone will qualify so speak an experience tax professional before pursuing this route.
If you owe money to the IRS or State and would like to your options, then feel free to contact me using the form on this page or by telephone at 1-888-351-3707.