What are my IRS Payment Options?
Why People Get Behind on Their Taxes
Every year people fall behind on paying their taxes. Often people fail to withhold enough income taxes or don’t pay estimated taxes to the IRS when their income rises. At times, people stop paying their taxes due to a catastrophic event in their life like an illness, the loss of a job, or the death of a loved one.
Unfortunately, most people discover their problems when their accountant prepares their income tax return. While panic often follows this discovery, we still have options for people that owe the IRS. While most people may only have a small tax balance due, we’ve even helped people that owe millions in tax debt. We have two major options for people that have tax debt.
The tax resolution and payment options available to people largely depends upon their income and whether they own assets. For people who have assets or disposable income, the best options are the IRS installment agreement options. An installment agreement is a payment plan that the IRS may grant to you – depending upon your circumstances. For some people, a settlement option may be available. These options may allow some or all of tax debt to be resolved without paying the full balance. These are tremendous programs that allow people to get a fresh start in their financial well being.
Tax Debt Payment Options
The IRS has several payment plan options. For example, if you qualify and if you are able to pay off the entire balance in a short period, you may qualify for a short term payment arrangements. A short term tax payment plan needs to be accepted by the IRS to avoid aggressive collection efforts like a Notice of Federal Tax Lien filing or an IRS levy.
You should request an installment agreement using IRS Form 8465 if you need a payment plan for an extended period of time.
If you qualify for a short-term payment plan you will not have to pay a user fee. IRS installment agreements, on the other hand, have a user fee that varies based upon your income.
Tax Debt Settlement Options
When people don’t have the resources or income to pay their IRS tax balance in full, the IRS is required to consider collection alternatives for the outstanding tax debt. There are a number of programs, but the following IRS programs are some of the most common settlement options that we use to resolve IRS tax debt:
- Offer-in-Compromise (also called the OIC) – There are three actual OIC programs. We explore the availability of each program for our clients – which includes the Doubt as to Liability OIC, the Doubt as to Collectibility OIC, and the Effective Tax Administration OIC.
- Innocent Spouse Relief (which includes Separation of Liability and Equitable Relief) – these programs are complicated programs that provide relief from tax that may be owed if a spouse or former spouse failed to report income, reported income improperly or claimed improper deductions or credits.
- Penalty Relief – if there are extenuating circumstances why a tax return was not filed or why taxes were not paid, we can assist our clients with a request for the IRS to remove or reduce a tax penalty. Ultimately, the IRS determines whether the circumstances warrant removing a tax penalty, but we know the rules that allow for IRS penalty abatement.
- Partial Pay Installment Agreement – although this option looks a lot like a payment plan, this program allows individuals to make lower monthly payments that will never fully pay their IRS debts. Usually, the statute of limitations for collecting the tax debt will run out before the tax debts are fully paid. As a result, we consider the partial pay installment agreement to be a viable option for resolving tax debts.
- Bankruptcy – most of the tax settlement options we employ are designed to avoid bankruptcy. We try to avoid bankruptcy for our clients due to the effect on their personal credit and there are usually other options for settling tax debt that make more sense. Also, not all tax debt can be removed using a bankruptcy due to a set of complicated rules and laws in the bankruptcy code. As a result, we’re always trying to avoid this option if possibl
You’re Going to Discover…
- How to quickly stop aggressive IRS collection activity. We don’t believe any honest, hardworking
individual has to endure their wages and bank accounts being seized by IRS revenue officers.
- There are multiple solutions to serious tax debt problems. Some solutions can be very
affordable. The best solutions do not involve bankruptcy and do not destroy your credit, your
employment or your reputation.
- There is a simple, straightforward process for determining the best tax solution to your problem.
- Why only about 1% of all CPAs and Attorneys are even qualified to solve serious tax debt
- Why the IRS talks differently to you than to a qualified tax professional that knows IRS policies
and procedures. As a result, representing yourself before the IRS can end up in disaster.
Private Tax Solutions
Private Tax Solutions helps business owners and individuals solve their serious tax problems. Our clients are located all over the United States, and we have even represented US citizens living abroad in places as far away as South Korea. Private Tax Solutions uses Certified Public Accountants, Enrolled Agents, and Attorneys to solve tax problems.
“Last we hear we had the unfortunate experience of being audited for a previous tax year. Jon Miller communicated with the IRS for us and he and Angela gave us direction on working through the process. I won’t say it wasn’t stressful but having a knowledgeable team on our side made it much easier. I am happy to say that our tax return for that year was accepted as filed after the audit. I consider that a win!”
“I cannot say enough about the work Jon and Angela did for me and for my clients. They are extremely competent and deliver more than they promise. Many accountants often say things that a taxpayer may want to hear, but Jon and Angela was straight with me from day 1 and they worked very hard as my advocate. I have no reservations referring Jon and Angela to all of my clients.”