It happens to the best of us. Something goes wrong with your finances and you haven’t paid in enough taxes. Suddenly, you’re broke and you owe the IRS.
The IRS has a couple of options that can help you out of that predicament. The easiest is to get an installment agreement. You may also qualify for an “offer in compromise” which means you get the IRS to accept a lower payment for the outstanding balance you currently owe.
If you’re looking for a way to get an “offer in compromise”, we have an expert on our team who can quickly assess your chances of reaching an agreement. Please send us a note at Contact Us and we can arrange for a free short interview to see if you would qualify for an offer in compromise on your past due taxes.
Now let’s talk about the installment agreement you may enter into with the IRS. In this case, it means that the IRS will accept a string of payments instead of one lump sum. Sometimes the agreement means more than 10 years. Interestingly enough, the IRS can’t force you pay for longer than 10 years unless you inadvertently sign an agreement that says they can.
Mistake #1: Telling the IRS you’ll pay longer than you’re legally required to pay.
Solution: Talk to a tax professional before you sign ANYTHING with the IRS.
One of the requirements of an installment agreement is that you have to have all your required tax returns up to date and filed. And during the time of the installment agreement, you need to continue to file returns.
A recent Tax Court case allowed the IRS to void the Installment Agreement when the taxpayer was delinquent on two tax returns.
Talk to a pro! Let us know if we can help.