Tax Debt – What to do if you owe back taxes. Two-part series.

Part 1 of 2 – IRS Installment agreement.

If you are facing tax collection issues from the Internal Revenue Service (IRS) and if the amount owed is less than $25,000 then an installment agreement would be the logical approach. IRS charges between $43 and $105 to process the agreement and for the most part the agreement is automatic.
This agreement allows you to pay your full debt in smaller, more manageable amounts. Installment agreements generally require equal monthly payments. The amount of your installment payments and the number you make will be based on the amount you owe and your ability to pay that amount within the time we can legally collect payment from you.

The specific tax form you will need is form 9465 and it provides instructions for filing out the application. The following link will take you directly to the IRS website for a copy of the form along with it’s instructions.

Part 2 will cover Offer in Compromise in the event you owe a greater amount than the $25,000 and/or you are unable to pay the full amount and would like to have the IRS consider accepting a smaller amount for payment in full.

Until next time – Dan