Paying your IRS tax debt in a lump sum is often difficult. This is especially true if you owe $25,000, $50,000, or $100,000 in back taxes, penalties, and interest.
If you need more time to pay your tax debt, consider any of the following three strategies.
IRS Installment Agreement
The IRS offers a variety of installment plans to fit your budget. If you can pay at least the minimum monthly payment amount, you can usually negotiate a payment plan that lets you pay back the IRS a little at a time.
Generally, you must pay your full tax debt off within six years or by the collections statute expiration date (CSED), whichever comes first. You can also make an initial deposit to lower the amount you have to pay each month.
Collection Due Process Hearings
If the IRS has filed a Notice of Federal Tax Lien or is going to levy your property, you will receive a collection due process (CDP) notice in the mail. This notice will inform you of your right to request a hearing within 30 days.
The IRS generally can’t move forward with a levy during this 30-day period. If you request the hearing, the IRS will also have to wait until the hearing is resolved to levy your assets. This gives you more time to negotiate a payment alternative, such as an Offer in Compromise.
If you don’t agree with the results of the CDP hearing, you also have the option to petition the U.S. Tax Court. You won’t have to pay your tax debt while the Tax Court case is ongoing.
Currently Not Collectible Status
Currently not collectible (CNC) status is a temporary measure to stop IRS collection activities. The IRS won’t seize your assets or garnish your wages while your account is in CNC status.
However, your balance will continue to grow every month due to the accrual of penalties and interest. You’ll eventually have to come up with a long-term solution to your tax debt problems.
If you need more time to pay back your tax debt and resolve your IRS tax problems, contact a tax attorney for assistance.
The Gartzman Law Firm handles IRS tax debt and other tax resolution cases. Use our contact form to request a consultation with an Atlanta tax resolution attorney.