What if you can't pay your taxes?

If you can’t pay your taxes, don’t panic - The IRS offers payment alternatives if taxpayers can’t pay what they owe in full. But remember one thing, to qualify for that plans, first of all you must have filed your tax return on time. Below are the Tax Payment options.

Online Payment Plans:

Short term Payment Plan: Taxpayers can ask for a short-term payment plan for up to 180 days on the total amount owed up to $ 100,000. There is no application form required to file or no fees, but interest and any penalties continue to accrue until the tax debt is paid in full.
Long term Payment Plan: Taxpayer can also ask IRS for a longer term monthly payment or Installment agreement option if the payment period is longer than 180 days, paid in monthly payments and the amount owed is less than $ 50,000 in combined tax, penalties and interest. If the IRS approves your long-term online payment plan (installment agreement), a setup fees may apply depending on your income. Setup fees can vary anywhere in between $31 to $225, depending on a few factors.

How to apply for the Payment plans: There are three ways to apply for payment plans.

Go to the www.irs.gov/payments and select the payment plan
Call the IRS and set up the plan
File Form 9465 Installment Agreement Request (This is for Long term Payment Plan only)

Offer in Compromise (OIC):

An Offer in Compromise is an agreement between the taxpayer and the IRS to settle their tax debt for less than the full amount they owe. Before the IRS will consider an OIC, you must have filed all tax returns, have received a bill for at least one tax debt included on the offer, made all required estimated tax payments for the current year, and made all required federal tax deposits for the current quarter and the two preceding quarters if you are a business owner with employees. If you are in an open bankruptcy proceeding, you aren't eligible to enter into an OIC. Not everyone qualifies for an OIC. Taxpayers should use the Offer in Compromise Pre-Qualifier to decide if an offer in compromise is right for them.

Offer in Compromise Pre-Qualifier: https://irs.treasury.gov/oic_pre_qualifier/

Temporarily Delay Collection:

If you can’t pay the tax due to lower financial condition and tax payment would prevent you from meeting your basic living expenses, IRS gives an option to delay your payment until your financial condition improves. Delay collection does not mean the debt goes away, it means the IRS has determined you cannot afford to pay the debt at this time.

To get this benefits, IRS may ask you to compete Collection Information Statements (like Form 433-F, Form 433-A or Form 433-B) and provide proof of a financial status.

Interest and any penalties continue to accrue until the tax debt is paid in full. You can call the IRS to request a temporary delay of the collection process.

If you have any questions regarding this or any other tax issues, dm me or email on yashshahtaxfreelancer@gmail.com

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