Payment Options If You Owe Back Taxes to the IRS
Milford, NH Resident Looks for Help
When you owe back taxes to the IRS, it is important to have an open line of communication with the agency. In most cases, they are willing to work with you to set up a payment plan or negotiate the balance owed. If you neglect to pay or communicate with the IRS regarding your outstanding tax bill, you may face liens on your home and other property, wage garnishment, and even restrictions placed on your passport. If you owe less than $50,000, you may be able to repay this money through the streamlined installation agreement. This allows you up to 72 months to repay the money. You can ask the IRS for an extension to pay, giving you an additional 180 days to gather the funds before paying the bill.
A Milford resident had neglected to pay his back taxes. Upon receiving a letter from the IRS, he was panicking at the amount of money owed and was concerned that he wouldn’t be able to pay the bill. The team at Merrimack Tax Associates was able to step in and help.
Collection Alternatives for Paying Outstanding Tax Debt
Millions of people filing their taxes each year will need an alternative option for paying back taxes, unable to front the full amount. The IRS has options for those unable to pay, eliminating the risk of losing your home or having your wages garnished. One of the most frequently chosen options is the streamlined installment agreement. Working with the IRS, a set amount of money will be paid each month as a payment plan for up to 72 months or until the debt is repaid. For many Americans, this is a great option to eliminate the debt over time in a way that is more affordable. To be eligible for this option the tax debt must be less than $50,000.
If you are not able to pay your tax bill, you can file an extension to pay. This allows you up to 180 days to find the funds and make the payment. This can be a good option to pay down the debt to below $50,000 and then opt for the streamlined installation agreement for the remaining balance.
The IRS will tack penalties onto any outstanding tax debt. You may be able to work with the agency to lessen these penalties, potential even reducing the amount of money owed, and coming up with a payment plan. Merrimack Tax Associates was able to work with the IRS on behalf of the Milford resident to come up with a plan to repay the money owed.