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What does a person upon the discovery of actually owing more income tax than he or she can immediately pay? Similarly, what options are available to a person who has accumulated a significant amount in back taxes?
Suddenly finding out issues in tax payments can take the wind out of anyone, especially if it adds to one’s financial burdens. It can be challenging enough to make ends meet during difficult times. Having problems with the IRS can lead to further financial complications that are best avoided.
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Fortunately, the IRS understands that income tax and back taxes can be a severe burden on taxpayers, which is why it instituted a program to allow for payments in monthly installments rather than a punitive lump sum.
To apply for an installment agreement, the taxpayer must submit the IRS Form 9465. If the total debt is less than $25,000 in taxes, penalties, and interest, the taxpayer can then complete an online payment agreement instead. Otherwise, he or she must submit a Form 433-F along with the Form 9465. The IRS will usually respond to the application within 30 days.
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Once granted, the taxpayer will get the time needed to pay the tax liabilities. As long as the terms of the agreement are honored and the taxpayer makes the payments on time, then any collection efforts by the IRS or other collection agencies will stop. However, it is also important to remember that the IRS will still apply interest and penalties to the unpaid balance until it is fully paid.
Wall and Associates Inc. helps taxpayers find solutions to many IRS tax problems. To find more information on tax payments issues, visit this website.
