Financial hardship happens; the IRS knows that very well. And even on the most well-crafted IRS installment agreement, unexpected expenses from things like medical bills or auto accidents, or change in income due to the loss of a job, may leave you unable to pay your approved installment plan
If you find yourself in this situation, hope is not lost. The most important thing to do is act immediately. Contact the IRS as soon as you are aware that you may not be able to pay. There are a number of options available to you. The IRS may adjust your installment plan to reduce the monthly payment amount and extend the timeframe, to make your monthly payments more manageable. Be prepared to provide proof upon calling, including any unexpected bills or any proof of loss of employment.
You might quality for an IRS Installment Agreement.
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Offer in Compromise
If an IRS installment agreement simply does not suit your specific needs, there are other options available. One such option is an Offer in Compromise. An Offer in Compromise gives you the opportunity to negotiate with the IRS to effectively lower the amount you owe. Through an Offer in Compromise, you can come to an agreement with the IRS to settle your debt for less than the total amount that you owe.
Sounds too good to be true, right? The good news is that it’s not! An Offer in Compromise is your chance to effectively haggle with the IRS, and can leave you with more money in your pocket, and back in the IRS’ good graces.
Contact us today to find out if you qualify for an IRS Installment Agreement.
Many Americans opt for an Offer in Compromise due to effective tax administration, that collection will cause undue economic hardship. But what exactly does this mean? To face extreme economic hardship means that, in paying your total tax amount, you will no longer have the funds to cover your basic living expenses. Situations that commonly cause economic hardship include:
A long term illness or disability that consumes most of your monthly income.
The care of dependents takes up your entire paycheck.
You are retired and on a fixed income.
Your unpaid taxes have put you at risk for bankruptcy.
You meet federal guidelines for low-income.
If you do opt for an Offer in Compromise, it’s important to enlist the help of a tax professional. They can help you craft a compelling argument as for your qualification, as well as manage the negotiations process. By enlisting the help of a professional, there’s a higher likelihood of qualification, and of a lower payment.
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