What happens if you owe the IRS – and you can’t pay? First, be sure to file your return anyway to avoid penalties for nonfiling. Then consider the following options, and choose the one that fits your financial situation.
Can you pay off the balance within 120 days? If so, apply for a short-term payment agreement. No fee is required.
Need more time? The IRS offers four types of installment plans. Generally, a fee of $120 is required ($52 if you pay through direct debit). To qualify, you have to first file all tax returns that are due and agree to pay on time in the future. Here are the available plans.
If none of the above methods will work, consider applying for an “offer in compromise.” That’s a procedure for paying less than you owe. In some cases, the IRS will settle for the maximum amount it deems collectible within a reasonable period, even though that amount is less than the balance due.
No matter the amount you owe, being proactive is a smart move. Contact us for help.