Owing back taxes to the IRS is a serious problem. If you are contractor or self-employed, income and Social Security taxes are not withheld by an employer and submitted to IRS on a consistent and regular basis. If you are struggling to cover basic expenses, a tax debt can go on the back burner and continue to grow until it seems insurmountable. If you owe the IRS money and can’t pay, you are definitely not the first person to be in this situation.
If you cannot pay the taxes you owe, there are possible payment options that might work in your situation. It is to your advantage to take action right away to resolve the problem before the IRS takes action to collect the debt. If you are proactive with IRS, more payment options will be available to you. Consult with an experienced tax resolution attorney as soon as possible.
Our California tax lawyers at Jaurigue Law Group can help you resolve the situation if you owe IRS money and can’t pay. Depending on the circumstances in your particular case, we can employ various strategies geared to minimize and reduce your payments.
The first step is to carefully consider your entire financial situation and determine how much you are able to pay. From that point, our seasoned tax resolution attorney can help you move forward with IRS as follows:
- If you can’t pay now, but can pay within 120 days: IRS will give you extra time up to 120 days to pay your tax debt in full. Interest and penalties on your tax debt will continue to accrue during that time.
- If you need to make monthly payments to cover the debt: Our tax resolution lawyer can work to arrange an installment agreement with IRS on your behalf. This is a formal agreement setting a fixed monthly payment.
- If you are unable to pay the tax debt in full: We can seek an Offer in Compromise under which IRS agrees to accept less than the full amount you owe. There are two reasons IRS will agree to an Offer in Compromise: 1) doubt as to the collectability of the debt because you lack the assets and income to pay it; and 2) paying the debt in full would be unfair or inequitable or create economic hardship.
In an Offer in Compromise, you can choose between two different payment options. You can choose a lump sum offer, in which you would typically pay 20% of the total amount offered, and the rest in 5 or fewer payments over a period of 5 or fewer months. The other payment option is a periodic payment offer, in which you make your first payment the day you submit the offer and pay the rest under the terms of your proposed offer within a period of 24 months.
At Jaurigue Law Group, we have helped many California taxpayers out of tough situations with the IRS. Contact us to get our knowledge, skills, and experience in your corner when you owe IRS money and can’t pay.