You owe money to the IRS but aren’t able to pay the whole balance at once. What can you do?
Relax. You have options. In most cases, taxpayers can qualify for a relief program to help repay their financial obligations to the IRS. The two most popular programs include:
Payment Plans with Installment Agreements – Payment plans can be set up with the IRS, in which you can make installments using the IRS Online Payment Agreement. It only takes a few minutes to make your payment. Those who owe $50,000 or less in taxes, including penalties and interest may be eligible for a payment plan extending up to 72 months under a long-term payoff option. Short-term options are available to those who owe less than $100,000 in taxes, with penalties and interest included in the total. The short-term payment plan lasts up to 120 days. The Online Payment Agreement is inclusive, and no paperwork needs to be filed. You don’t have to call or write the IRS, as everything is taken care of online. Long-term payment options require the taxpayer to file Form 9465, which can be downloaded from the IRS website. Mail the form and a copy of your tax return, IRS bill, or notice.
Offer in Compromise – taxpayers who qualify for an offer in compromise can agree to settle their tax debt with the IRS for less than they actually owe. The IRS offers a free online tool which can help you determine if you’re eligible for an offer in compromise.
You can access your federal tax account at IRS.gov/account, and all information is secure. You can check the amount you owe, make an online payment or set up an agreement to pay. You’ll also have access to your tax records and the last 18 months of your payment history. You can also check your important tax information for the current year filed. IRS.gov/secureaccess will lead you to the appropriate identity authentication process to ensure your information is safe and secure.