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Are you Taxes Backed Up? This is How to Pay them Off.

  • February 26, 2019
  • Issac Qureshi
  • Branding, Coaching, Dealmaker, Deals, Development, Issac Qureshi, Leadership, Marketing

If you owe back taxes to the government, the last thing you should do is to avoid the situation. Even though it may be stressful and seem overwhelming, it is important to work with the IRS to get your taxes back in order. Many people are under the impression they have to pay their entire tax bill at once. This couldn’t be further from the truth. The reality is the IRS is more than willing to work with anyone that can’t pay their tax bill in full. There are installment plans that can be applied for, where you will be able to pay back your taxes throughout a designated time period. Chipping away at the tax bill you owe is far better than simply trying to avoid the problem. The first thing you’re going to want to do when it comes to resolving your back taxes is to determine exactly how much you owe.

If you did not receive a tax return, the IRS should send you a tax bill in the mail. This will let you know exactly how much you owe, allowing you the information necessary to evaluate your finances decide whether you will be able to pay your tax bill or not. While you can absolutely apply to pay back your taxes on an installment plan, you may also be able to settle the total bill at a lower cost if you are able to pay the bill right away. An offer in compromise allows an individual that owes back taxes the opportunity to settle for a lower amount that the IRS has agreed to. The IRS would rather take a lump sum of money right away, as opposed to receiving installments over a long period of time. You can use this to your advantage if you can come up with the funds to pay the agreed upon amount.

However, the IRS has a fairly stringent policy when it comes to offers of compromise. They will evaluate your financial capabilities and determine whether you qualify for a compromise. If they believe you are financially able to pay back the entirety of the tax bill through installments, there is a very good chance they will avoid a compromise. Even if the odds may be stacked against you, it is still generally a good idea to explore this option.