Can’t Pay Unpaid IRS Taxes? Setup a Payment Plan

Posted: 15 Sep 2008 | Categories: Taxes

Having unpaid taxes with the IRS can lead to many problems. The IRS has stronger collection mechanisms than any other collection agency in the United States. Every year the IRS gets more and more efficient at collecting taxes and there are far fewer individuals that slip through the cracks each year. Once the IRS knows you have unpaid taxes it will begin its automated collection system and will go through a series of automated notices and phone calls, each one getting more severe.

The IRS deals with literally thousands and thousands of individuals each year that cannot pay taxes. Know that the IRS is willing to work with you and will help you setup a manageable solution so you can pay the taxes owed. Not all solutions require you to make full payments of the tax amount owed to the IRS. The IRS offers payment plans to allow individuals to make monthly payments in small increments to pay back their taxes. Once a payment plan is setup, you will be back on good terms with the IRS and they can no longer take any collection actions against you.

There are two types of payment plans you can use to resolve your unpaid IRS back taxes. The IRS allows you to apply for an installment agreement and if you cannot meet the minimum monthly requirements for paying the installment agreement, an individual can qualify for the partial payment option. The IRS likes to break up settlement methods based upon financial situation of the individual that owes taxes and the installment agreement is for individuals who can pay off the entire tax amount owed in equal monthly payments in a period of 3 years or less. If an individual cannot pay the monthly amounts required to pay off the balance in the required amount of time, they may qualify for a partial payment installment agreement in which they will make smaller monthly payments than the “original” installment agreement. Individuals that qualify for the partial payment option will go under review every couple years to determine if the IRS can increase payments.

To apply for an installment agreement or partial payment installment agreement you will have to fill out IRS form 9465. If you are applying for the partial payment option, you will have to have a tax professional help you setup and suggest a monthly payment amount and fill out IRS form 433-A, Collection Information Statement, and write a statement that you are requesting the partial payment option. If you are applying for the “original” installment agreement you can also do it online by filling out the Online Payment Agreement Application on the IRS website.

If you owe over 25k, it is highly suggested that you use a tax professional to assist with your filing. The IRS is much less likely to accept these types of agreements when the tax amount is above $25,000. Take advantage free consultation that many tax relief companies offer and see if there are better options for you.

More solutions to dealing with Unpaid Taxes. Find the best solution for your financial situation and connect with tax professionals to help. Receive a free consultation and quote.

More information on IRS Payment Plans that you can use to settle unpaid taxes.

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