It has been eating at you for some time. You owe thousands of dollars in taxes to the IRS and do not know how to address this situation. Avoidance and procrastination have been the culprits to the issue. But now is the time to take control. Don’t be afraid. Know that you have options.
Cooperation is key
Fear is natural in this situation, but this also is not the time to run scared. The IRS is like a shadow and is always present. Fortunately, it is never too late to pay your taxes. If you take the initiative and show the IRS a willingness to cooperate, the IRS will do the same. You can contact the agency to get started or get help from a legal tax professional who can offer guidance during each stage of the process.
Many U.S. taxpayers who are behind on taxes can enter into a payment plan. Below are some of the options:
- Short-term payment plan: The plan allows you to pay the amount you owe in 180 days. Taxpayers who owe less than $100,000 may qualify for this option.
- Long-term payment plan or an installment agreement: Taxpayers who owe $50,000 or less qualify for this plan. It allows up to 72 months or six years to pay.
- Negotiating a new tax bill: Some taxpayers are able to work with the IRS to negotiate a new tax bill. This is what is known as “an offer in compromise.” In this option, taxpayers settle their debt for less than half of what they owe. However, they must show the ability to pay and lack of income to cover the full amount.
Payment plans are a great way to pay a past due tax bill. However, it’s important to note that taxpayers are assessed interest as much as 20% and possible penalties.
Don’t lose hope
Many taxpayers have found significant relief and peace of mind after they take the step to get their past-due taxes in order. Know you have options and the IRS will work with you. Seeking help from a qualified tax attorney can also alleviate the possible stress involved, as they will know the law and what steps to take.