If you cannot pay the IRS, you may have several options depending on your circumstances. To start paying your current taxes is crucial. Before you can access most of these remedies, you must file your income tax returns and pay your current taxes.
Here are some of the options the IRS provides to taxpayers who owe money. Whether these are applicable to you depends on your circumstances.
In this case, you are negotiating a payment arrangement with the IRS. A variety of agreements are available, including regular, partial-pay, and streamlined ones. The choice you make is highly dependent on the amount you owe and your current financial situation.
In an offer in compromise, the IRS agrees to accept less than the full total owed. Although the IRS does not have to accept an Offer, presenting it in accordance with IRS guidelines increases the chances that it will be granted.
Not all tax professionals know the ins and outs of preparing an Offer that has a high chance of getting accepted. A proven expert with a track record of success will be able to help you with your Offer.
- “Currently Not Collectible” Status
Deferring your debt is possible with this status. In other words, the IRS is still owed money for the debt you owe them. You will stop having your bank accounts levied or other collection attempts by getting this status. The problem usually arises when your income is not sufficient to cover your living expenses. In the event that your income rises, the IRS will re-evaluate your situation.
Bankruptcy can be extremely helpful in stopping IRS collection efforts, discharging old income taxes, and forcing an otherwise unwilling IRS to accept repayment plans. There is also the possibility of the discharge of tax penalties through bankruptcy. The most effective route is to seek the advice of several professionals in this complex area – an accountant, a tax resolution professional, and an attorney who has experience with bankruptcy issues.