A taxpayer can run into some problems when it comes to the payment of tax. But IRS is not supposed to know what is going on unless they are properly notified. IRS must be properly and formally informed of a taxpayer’s incapability to pay the tax. As it is not very easy or common to prepare to face the IRS, it is better to seek professional help. It’s possible that the Internal Revenue Service will let you divide up your total bill into several smaller payments. In this article you will get some proper information.
Plan for Paying Back the IRS
Payment plans offered by the IRS come with a fee, despite the fact that they can be helpful if you do not have the cash necessary to pay your tax debt in full. You may be required to pay a setup charge in addition to penalties and interest on your balance until it is paid in full.
Presenting the Compromise Offer
Through a process called as an offer in compromise, the Internal Revenue Service (IRS) may let you settle your tax obligation for a sum that is less than what you owe if you are having trouble paying your full tax bill. An offer in compromise is a legitimate choice for people who are unable to pay their full tax. The Internal Revenue Service will take into consideration a variety of factors like:
- Your capacity to make payments.
- Your monetary gain.
- Your expenses
- Your properties, etc.
Reductions in Penalties or Interest Rates (or Both)
There is a possibility that the Internal Revenue Service will reduce or waive any penalties that you have to pay. These requirements may include not having any penalties for the preceding three tax years or paying or making arrangements to pay any taxes that are owed. Even if you are granted an exemption, you will still be responsible for paying your taxes.
