A lot of people struggle to pay their taxes. If you’re one of them, don’t panic. The best thing to do here is to contact the IRS. Sure, contacting the IRS when you’re struggling with your taxes may be the last thing on your mind, but the IRS can actually help you get out of this rut.
How? Through an IRS payment plan.
The IRS Payment Plan
The payment plan of the IRS works the same as standard payment plans—the amount is split to ease the repayment burden. Usually, this is a monthly plan.
An IRS payment plan is ideal if you can’t pay the full amount you owe the IRS. However, before you think about ignoring it, don’t; it will likely bite you in the end.
Are You Eligible for an IRS Payment Plan
There are certain requirements you need to meet to be eligible for an IRS payment plan:
- You need to owe less than $10,000
- Your past five years of taxes were filed and paid any income tax balance
- You don’t have an installment agreement
- You agree to pay the full amount within three years
- You agree to comply with tax law
- You are financially unable to pay the liability in full
How to Apply for an IRS Payment Plan
You can apply for an IRS payment plan online. Make sure you are ready with your details, such as your general information and what you owe. If you are given an activation code, this will take 5-10 business days.
Types of IRS Payment Plans
There are two IRS payment plans available: short-term and long-term. A short-term payment plan is ideal for individuals who owe a maximum of $100,00 in combined tax interest and penalties. Usually, the payment terms are 180 days or fewer.
On the other hand, a long-term IRS payment plan is good for over 120 days if you owe $50,000 in combined tax, interest, and penalties.
It is the IRS who will determine the amount you can afford based on your income and expenses. Moreover, they will also be the ones to determine the payment plan duration for you.
Other Things to Know
Some other things to know about getting an IRS payment plan is that it can be revoked. Your payment plan can be revoked if you miss your payments, fail to file or pay taxes after the agreement, and intentionally misreport information.
Be cautious about getting your plan revoked, though, as this will make it harder for you. The good thing is, you will usually get a warning from the IRS before your plan is revoked.
You don’t need to stress yourself out over those unpaid taxes. An IRS payment plan can help you ease the burden. Doing so will make it easier for you to pay what you owe and lessen the stress on your end. You can also consider talking to a tax specialist to help you through the process. That way, you get professional help that will let you see all the options available to you.
Get tax relief help at Axiom Tax Resolution Group in Birmingham, AL. Our trusted tax professionals will help you find a solution to your IRS tax problem. Contact us today to get started!