It’s tax season, you’ve filed your taxes and owe the federal government a decent chunk of change without the means to pay in full the amount due. What do you do?
There are a few different options to pay your tax bill:
1. Offer in Compromise
In pursuing an Offer in Compromise, you offer an amount considerably less than the total amount due and request that the IRS accept that amount as full satisfaction of the tax debt owed. You’ll want to show that you cannot pay the full amount due and their collection efforts will be relatively fruitless in order to have the greatest success in this measure. This is often a common step taken to reduce the amount of debt owed.
2. Installment Plan
The IRS often attempts to get their taxpayer into a payment plan that results in you paying the entire amount over a period of time. This should probably be your last choice, as you won’t catch a break.
What if you don’t think you owe the full amount?
Contest the amount. There are various ways to do this depending on the type of tax owed. It is important to have a professional experienced in this field review your case in order to determine whether the IRS is wrong in their position. Often times, a professional will be able to abate any penalties, reduce interest and potentially eliminate the principal. You will surely want someone advocating for your side if contacted by the IRS so that you may even the playing field.