I owe money to IRS but I can’t pay it.What are my options?
I owe money to IRS but I can’t pay it.
What are my options?
If you owe money to IRS and cannot afford to full pay the balance we can help you. There are several options available to you depending on your financial situation and the amount you owe. The Pless Law Firm, P.A. can evaluate your situation and help guide you to the best solution.
Currently not collectible status
In some cases you may qualify for hardship status with IRS. If you qualify for this status it means that IRS will temporarily close your case as uncollectible and hold off taking any collection action against you. If your account is placed into currently not collectible status this does not mean that the tax debt goes away and interest and penalties will continue to accrue. If you qualify for currently not collectible status you may also want to consider filing an Offer in Compromise to settle your tax debts once and for all. The Pless Law Firm, P.A. can help you navigate through this process and get your tax problems resolved.
If you do not qualify for currently not collectible status but cannot afford to pay your tax liability in full you may be eligible to pay back your taxes in monthly installments. If the total amount of your tax liabilities is $50,000 or less you may qualify for a streamlined installment agreement. This means IRS will give you six years to full pay the tax, interest, and penalties. You must be current with all tax return filings and estimated tax payments before IRS will agree to an installment agreement. If you owe more than $50,000 in back taxes IRS will determine your ability to pay based on your monthly household income and the IRS allowable expenses. IRS will require you to prepare a collection information statement. Before giving any information to IRS call The Pless Law Firm, P.A. for a free consultation.
Offer in Compromise
An Offer in Compromise is the process IRS offers taxpayers to settle their tax debt for less than what they owe. However, the Offer amount is based on a strict calculation based upon your income, allowable expenses and equity in assets. Don’t be fooled by those misleading TV or radio commercials that claim they can settle your tax debt for pennies on the dollar.
There are two types of Offers that you can submit to IRS. The first option is called the Lump Sum Cash Offer. If you select this option you must pay the filing fee to IRS, 20% of the Offer amount and if the Offer is accepted you have 5 months to pay the remaining balance. The other type of Offer you can submit is called the Periodic Payment option. If you select this option you must pay the filing fee to IRS and make monthly payments while the Offer is being reviewed. The Pless Law Firm, P.A. can determine if you are eligible to file an Offer and if you are eligible we can help you decide which Offer is the right option for you.
If the total amount of your tax liabilities is less than $50,000 the general time frame for IRS to review your Offer in Compromise is 6-12 months. If your tax liability is $50,000 or more IRS Counsel must also review the Offer in Compromise. This means the review process can take more than 12 months. While the Offer in Compromise is pending IRS cannot take enforced collection action against you. However, this also means that the collection statute is not running. The Pless Law Firm, P.A. can guide you through the process to help you end your tax nightmare.