How can you settle your tax debt? Your resolution options depend on the status of your IRS account and your ability to pay. Even if you have received IRS letters about taxes you owe, your account may not be in a collection status. It is important for you to understand the status of your IRS account, what options you have, and to negotiate an agreement with the IRS as soon as possible.
If you file your taxes and don’t pay the amount due in full by the deadline, you can expect an IRS letter explaining how to pay. Eventually, they will escalate your account into the collections process which can include filing of tax liens and levies. A tax lien is the federal government’s legal claim on your property such as your home. This will prevent you from selling or refinancing your property without first resolving the lien. The IRS may file a notice of levy to collect taxes by taking money from your tax refunds, wages, bank accounts, social security, or even taking away your property. When a notice of levy is filed, you will have a very short deadline to work with the IRS before they start taking everything they can.
The longer you wait to deal with IRS problems, the more complex it becomes to fix them. If you can’t afford to pay your tax in full, you can set up a monthly installment agreement or offer an amount that you can afford. The IRS will negotiate an agreement by determining what you can afford to pay without causing a financial hardship. It is also possible to get liens fully or partially removed if you can prove that it will make it easier to settle your tax debt. You have options, but you need to call me before it’s too late.
Austin Long, EA