What If I Owe The IRS More Than $10000?

What If I Owe The IRS More Than $10000?

If you owe the IRS more than $10,000, and you cannot pay your tax bill in full, the IRS will try to collect the debt with aggressive measures. This may include late and failure-to-file penalties, issuing a tax lien against your property, or seizure of assets. If you contact the IRS quickly after realizing you owe them money, they may be able to set up a payment plan or offer other relief options. The sooner you act, the better, as penalties and interest can pile up fast.

If you have $10,000 or more of IRS tax debt, here's what you need to know.

If you have amassed this much tax debt, logic would dictate that you must have made some good money, to begin with, and can now afford to pay your debt.

They don't understand what's happening in your life making it difficult to spend, for example, $15,000.

  • You can set up a payment plan with the IRS to help you pay your taxes.
  • To have your penalty or interest decreased, you can apply for an offer in compromise.
  • You may be eligible for a temporary delay in collection, disaster relief, or innocent spouse relief.
  • Look for a way to pay
How To Set Up An IRS Payment Plan?

How To Set Up An IRS Payment Plan?

The IRS offers a payment plan option for those who owe taxes and can't afford to pay the full amount all at once. The plan is called an Installment Agreement, and you can fill out IRS Form 9465 to apply for one. Installment plans enable you to make smaller payments over a longer period, usually 72 months (6 years).

There are two types of installment plans: guaranteed and streamline.

  • A guaranteed installment plan requires a financial disclosure form and may require a tax lien, but you can make smaller monthly payments.
  • A streamlined installment plan doesn't require as much financial disclosure and doesn't usually involve a tax lien, but your monthly payments will be slightly larger.

You have a few options when it comes to submitting your application for an installment plan: online, by phone, or through standard mail. The IRS will then review your application and decide if you meet the requirements for the program. If so, you'll receive a notice that outlines all of the details and terms of the agreement. Just remember — even though you're on an installment plan, interest and penalties will still add up during that time. So try to pay off your debt as soon as possible! You can make those payments in the same ways listed above (online, by phone).

Why You Should Consider An Installment Agreement?

There are a few advantages to an installment agreement.

  • Payment plans that won't break the bank.
  • Don't worry so much! As long as you make your payments, the IRS won't come after you.
  • IRS collection attempts will pause

Understand that if you're unable to keep up with payments on an installment agreement, the IRS could file for a tax lien or levy action. In this case, it may be beneficial to offer them a lower amount than what's owed.

What If I Owe The IRS More Than $10000?
Why You Should Consider An Installment Agreement?

Qualifications For IRS Payment Plan

Note that installment plan approval is not guaranteed. To qualify, you must be current on all tax filings and other taxes owed, and you cannot have already requested an installment agreement in the past 5 years.

The IRS will not approve your request to pay taxes in full if they decide that you can pay them. You will need Form 9465 to apply.

Application and set-up fees start at $31 to $225, but the total cost will depend on how you pay (e.g., check or direct bank draft) and whether you use their online application.

The most affordable way to pay is by using an online payment agreement (OPA) application at IRS.gov/OPA and setting up a direct debit, which has a one-time $31 setup fee that can be waived for lower-income applicants).

Is Offer In Compromise An Option?

An offer in compromise (OIC) is a contract or agreement between a taxpayer and the IRS that settles your tax debt that is less than what you owe. You must take the following three actions to be considered for an OIC: file all tax returns, make estimated tax payments for the current year, and not currently be in any open bankruptcy proceedings.

Furthermore, you must demonstrate that the amount you can pay is less than what you owe and that it is "uncollectible" - meaning, there is no reasonable expectation of full payment within the life of the statute of limitations.

Making an offer in compromise isn't easy though. The IRS will require a lot of information to evaluate your financial situation and will consider income, assets, expenses, and other criteria. You'll also need to pay a fee of $186 or 20% of the total offer amount (whichever is greater).

In the end, it's important to remember that an installment agreement may be your best bet when it comes to resolving your tax debt — but you should still consider all of your options before reaching a decision. An offer in compromise could be the best solution if you qualify, while an installment agreement may be the best option if you're not eligible or can't afford the OIC fees. Either way, speak with a tax professional to discuss your situation and find a solution that works best for you.

Getting A Professional Help. Is It Worth It?

Yes, it's worth getting professional help when dealing with tax debt. The IRS is a big and complex organization and navigating its rules and regulations can be overwhelming. A qualified tax professional can help you understand your rights, assist with paperwork, provide helpful advice on which payment plan or offer in a compromise solution is best for you, and make sure that you take advantage of all the available tax breaks.

Ideal Tax Solutions is the perfect place to get assistance with your taxes. With a solid relationship with the IRS, they can frequently haggle on your behalf for a lower payment or an extended payment plan. Although you might have to pay Ideal Tax Solutions for their services, it will most likely be less than the interest and penalties that rack up if you don't receive help and end up making tax blunders by yourself. They provide comprehensive coverage of all things related to taxes - from filing your return correctly so you maximize benefits like deductions and credits. Don't let the stress of tax season get to you - let Ideal Tax Solutions help you make the most of it.