IRS Debt Payment Options
You have an outstanding IRS debt, but the amount is more than you can afford. This can happen for various reasons, such as not having enough withholding held from your paycheck, or if you are self-employed and don’t make estimated tax payments, etc.
For whatever the reason, you have this IRS debt and you can’t afford to pay it. You are wondering what options you may have regarding this debt. There are several options that the IRS lists for taxpayers to pay the taxes they owe.
If you are just now filing your taxes, the IRS offers this information on their website, “…pay as much as they can of any taxes they owe to minimize any accrued penalties and interest.”
The IRS also offers the following debt repayment options on their website:
- Request Extension of Time to Pay
- Apply for Installment Agreement
- Pay by Credit Card
- Request for Extension of Time to Pay
With this option, the debtor may qualify for an extension of the time to pay the taxes owed. The website is specific in saying that the IRS is willing to offer the extensions to allow taxpayers time for debt repayment.
You can request an extension from 30 to 120 days depending on your specific circumstances. According to the IRS website, taxpayers qualifying for an extension will pay less in penalties and interest with this method than if they were to apply for the installment method. Taxpayers can request the extension on the IRS website.
Apply for an IRS Installment Agreement
The IRS, at its discretion, may allow taxpayers to pay remaining balances in monthly installments through the installment agreement. If you owe less than $25,000 in IRS debt, you may apply online and then attach a Form 9465, Installment Agreement Request, to the front of your tax return.
Taxpayers must state what payment they can make each month and what date they would make such payment. There is a $105 fee from the IRS to set-up this arrangement. The fee can be reduced for those who set up a direct debit agreement or if your income is below a certain level. More information about installment agreements can be found on the IRS website.
If you are overwhelmed by IRS debt, whocanisue.com can help you find an experienced IRS tax attorney in your area to assist you with the complicated nuances of tax law and installment agreements.
IRS Installment Agreement Direct Debit Options:
- Direct Debit from your bank account
- Payroll Deduction from your employer
- Payment via check or money order
- Electronic Federal Tax Payment System (EFTPS)
- Payment by credit card via phone or Internet, or
- Online Payment Agreement (OPA)
- Pay by Credit Card
For this option, the taxes must be paid in full on your credit card. You can use the Official Payments website or the Pay1040 website. Both providers accept Visa, MasterCard, American Express, and Discover.
If you charge your tax payment on a credit card, the IRS will charge you a convenience fee based on the dollar amount you are charging. This fee is in addition to the taxes you will be paying. Just keep in mind that using the credit card method will oblige you to make payments to your credit card company which may include interest.
Whichever method you choose, you must be consistent with your debt repayments and make sure they are received on time. With any IRS debt repayment plan, communication is important, so if you should run into any problems, contact the IRS right away.
IRS Debt Defense and Debt Repayment Plans
Another option is to hire an experienced tax attorney to work out the options and details for your IRS debt plan for you. The lawyer will be familiar with the positives and negatives of each of the debt repayment plans and can apply them to your specific circumstances. Additionally, a tax attorney can work with you on an IRS debt defense plan, wage garnishments, or bankruptcy options, if needed.
Tax laws are complicated so it is important to speak with an financial attorney who specializes in tax law before filing. whocanisue.com can help you find an experienced IRS attorney in your area.