5 options when you can't pay your IRS Tax Bill
What to do when you can't pay your IRS tax bill? This is a question that many people find themselves asking when they file their taxes and discover that they owe the IRS. The IRS is not known for being forgiving, especially when it comes to back taxes. However, there are several options available to you if you find yourself in this situation. In this blog post, we will discuss those options in detail.
When the option is to pay the bill in full is out of the question, then read on as there might be some good news for you.
Option 1: Extended time to pay the balance
The First option, If you only need a brief time of up to 120 days to pay your IRS Bill, the IRS may place collections hold to allow you to pay the bill. These collections hold is called a "temporary delay of collection." During this time, the IRS will not take any collection action against you, such as levying your bank account or wage garnishment. However, interest and penalties will continue to accrue on your tax bill during this time.
Option 2: Payment Plan
The Second option is to request a payment plan. This allows you to pay your bill over time, usually in monthly installments. The IRS also offers installment plans for taxpayers. There are approximately 7 types of Installment Agreements that the IRS offers. all depending on your financial status, the amounts owed to the IRS & the collection statute date.
Option 3: Financial Hardship Request
The Third option is to apply for a hardship waiver or Currently Non-Collectible Status when you are experiencing financial hardship. This allows you to reduce or waive the interest and penalties on your tax bill. To qualify for a hardship waiver, you must meet certain criteria, such as being unable to work because of illness or being homeless.
Option 4: Offer In Compromise Program
A Fourth option is to apply for the Offer In Compromise program or OIC. The OIC is a tax settlement program that eliminates your tax debt. There are requirements that are needed to be met, and you must qualify in order to apply for the program.
When dealing with the IRS, you have to be persistent as they have had tremendous delays with call handling and processing filed tax forms. You also have the right to be represented, and a power of attorney can do all the negotiations on your behalf. Orange County Tax Attorney, Semper Tax Relief, has the knowledge, expertise & experience to settle IRS tax problems. We highly recommend contacting them, as they provide a free case review.
Option 5: Bankruptcy
A fifth option is to file for bankruptcy. Bankruptcy can help you discharge your IRS debt and start fresh. However, it should be used as a last resort, as it can have serious consequences. if you are thinking about filing for bankruptcy, it is highly recommended that you consult with a bankruptcy attorney.
Tax Planning & Compliance to prevent future problems
The biggest step in overcoming a tax balance is to remain in tax filing compliance. What this means is that the IRS will be off your radar if you:
Timely File your income tax return
Pay any taxes due within the deadline.
Here at Orange Coast Tax, we can help keep you in tax filing compliance by filing your taxes accurately & timely!
