Now that "tax time" is over, you might be fretting how you will handle what you owe the IRS. If you don't believe that you will meet the hardship criteria to settle your IRS debt or have it declared as un-collectible, you'll probably have to get into some kind of payment plan.
Here's a review of the different kinds of payment arrangements you can get into:
Lien avoiding Payment plans - If having a Federal Tax lien is absolutely something you want to avoid, you can get into a Streamline payment agreement if no lien has been filed yet by bringing the balance below $50,000.00 and then entering into an agreement. If you already have a lien filed, you will have to bring balance below $25,000.00, enter into an installment agreement, make three payments and then apply for a lien discharge. Both of these type agreements are "streamline" agreements in that you don't have to give any financial disclosure to get into them.
Non financial disclosure payment plans - If you owe less than $100,000, you can get into a payment plan without financial disclosure as long as you pay the debt off in 72 months. Problem is if you owe more than $50,000 you should expect a Federal Tax lien to be filed unlike the agreements described above.
12 month adjustable plans - If none of the streamline agreements above are doable for you AND if you also don't meet the criteria for hardship, you can work out a 12 month adjustable agreement with IRS with full financial disclosure. These type of agreements are "band-aids" that you usually have to propose when you are under IRS scrutiny. For example, to satisfy an IRS agent who has your case, you can propose paying the IRS back in "tiers:" $250 a month for a year and increasing to $1000 a month, a year from now. But are you signing your life away? No. If you can't handle the increase a year from now, default the agreement and re-negotiate it.
If you owe money to the IRS that you can't afford to pay, let the experts at WATAX advise you before you make a move. Email us a description of your tax issue and we'll contact you or call 1-888-282-4697.