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Understanding Your Repayment Options When You Owe The IRS

OWE THE IRS?

Have You Explored All of Your Repayment Options?

Getting a bill from the IRS can be stressful. Although most people get a refund, a small number of people and businesses may receive a bill. Don’t freak out, you have options. Here’s a quick list of the options you have:

CREDIT CARD OR LOAN
You can get a loan or use a credit card to pay your balance in full. Interest rates on credit cards and loans are typically lower than the amount of late fees and penalties charged.

ADDITIONAL TIME TO PAY
If you simply need a brief amount of extra time to pay, you can contact the IRS at 1-800-829-1040 and request up to 120 days to pay your full balance. The IRS doesn’t charge any fees for this option, however an interest and penalty fee may be imposed.

INSTALLMENT AGREEMENT
An installment agreement is an acknowledgement between you and the IRS to pay the amount due in monthly installment payments. To qualify, you must first have filed all required returns and be current with estimated tax payments. The IRS charges a one time fee, but reduced fees are available if you choose to have your payments made through direct debit from your bank account or if you who meet the IRS’s requirements of being a low income taxpayer.

If you owe $50,000 or less in combined tax, interest and penalties; you can request an installment agreement online using the Online Payment Agreement Application

If you owe over $50,000 click here to download the Installment Agreement Request Form 9465.

IMPORTANT NOTES
Even if you set up an installment agreement, the IRS may still file a Notice of Federal Tax Lien to secure the government’s interest until you make your final payment.
If the IRS believes that your tax liability can be paid in full as a lump sum or through a payment agreement, your offer may not be accepted.

OFFER IN COMPROMISE
If you’ve explored all other options and still feel like you are unable to pay your full tax liability or doing so truly creates a financial hardship, you may request an Offer in Compromise.

An Offer in Compromise allows you to settle your tax debt for less than the full amount that you owe. The IRS uses the following information when making their consideration:

  • Ability to Pay
  • Income
  • Expenses
  • Asset Equity

Click here to access the IRS’s Offer in Compromise Pre-Qualifier tool.

TEMPORARY DELAY THE COLLECTION PROCESS
A Temporary delay occurs when the IRS determines that you cannot pay any of your tax debt and reports your account as being currently not collectible. Your tax liability is temporarily delayed until your financial condition improves. THIS DEBT DOES NOT GO AWAY. The debt owed will be subject to penalties and interest fees until the full amount is paid. The IRS may also file a Notice of Federal Tax Lien to protect the government’s interest in your assets. Proof of your financial status and a Collection Information Statement may be required for approval.

AVOID BEING CHARGED LATE PENALTIES AND INTEREST
Remember to take Action as soon as you receive your bill or as soon as there’s a change in your financial situation to avoid late fees and penalties.

Have Questions?
Contact Us Today at (813)872-9900 to schedule an appointment

 

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