At the end of last tax season, it may have shocked you to learn that you owed the IRS money. Perhaps you still had not paid what you owed from the previous year. Putting off a debt to the IRS is not like avoiding any other debt. The government has powers for collecting unpaid taxes that few other creditors possess. This can include garnishing your wages and putting liens on your property without the bother of a lawsuit.
If you are unable to come up with the funds to pay what you owe to the IRS, there is no need to panic. As severe as the penalties are for unpaid taxes, the government also offers numerous options for repaying your debt. These are not always easy to obtain, so you would be wise to reach out for information and guidance from an experienced legal professional.
Searching for relief from your tax burden
It is not unusual for an overdue tax bill to quickly get out of your control, especially if you fail to attend to it as soon as possible. Late penalties and interest continue to accrue even if you decide to file amended returns. If you are unable to pay the entire amount at once, you may qualify for one of the IRS' payment plans.
After you submit a request for one of these plans, the IRS will evaluate your current financial situation, your living costs and other necessary expenses. You may qualify for one of the following plans:
- An installment agreement if you owe $50,000 or less
- A streamlined payment if you owe $30,000 or less
- An alternate payment plan if you are unable to afford the usual monthly minimum for the other agreements
- An offer in compromise, in which you propose to repay the IRS a lower total amount than you owe
- A deferment, in which you request that the IRS suspend your repayment obligations until you are more financially stable
You must be current on filing your taxes for the last five years to qualify for any of these plans. The IRS wants its money, and it is not a simple task to qualify for a lower amount or drawn-out payments. However, this may be the only option for you if you are struggling to meet your other financial obligations. You may find your odds improve if you have an aggressive advocate in your corner, especially one who has experience dealing with matters of federal and Oregon tax laws.