How to Pay Off Delinquent Tax Debt: See The Best Payment Plan That Will Suit Your Unique Circumstance

pay off delinquent tax debt

It is not a secret that many taxpayers struggle to pay off their tax debt. The IRS takes delinquent debt seriously. If owe back taxes to the IRS, we strongly advise that you seek professional assistance as soon as possible. If you leave them unpaid, the IRS may resort to aggressive collection measures such as wage garnishments, property seizures, and bank account levies. The good news is, the IRS offers several payment plans to help taxpayers pay off their delinquent tax debt.

In this article, we’ll look more closely at the different options that the IRS offers and help you choose one that best suits your specific situation.

Several Ways To Pay Off Delinquent Tax Debt:

1. Guaranteed Installment Agreement

This option is available to taxpayers who owe $10,000 or less in taxes. To avail of this plan, the taxpayer must agree to pay the debt in full within three years. No financial information is necessary, but you must have filed all required tax returns.

2. Streamlined Installment Agreement

This plan is suitable for taxpayers who owe $50,000 or less in taxes. In this option, the taxpayer must agree to pay the debt in full within 72 months. In most cases, you do not have to provide financial information to the IRS. However, filing all required tax returns is a requirement.

3. Partial Payment Installment Agreement

If you owe more than $50,000 in taxes, then this plan is for you. This option allows taxpayers to pay a portion of their debt over the statutory period, generally within 10 years. A full financial disclosure is necessary, and a lien may be filed.

4. Extended or Flexible Payment Plan

Taxpayers who owe up to $250,000 in taxes and cannot pay the debt within 72 months are eligible for this plan. The taxpayer must agree to pay 100% of the debt over a longer period of time, up to 120 months. Disclosing any financial information is not necessary; however, a lien may be filed.

5. Currently Not Collectible

Taxpayers who are unable to pay their taxes due to financial hardship may qualify for this plan. This IRS places the taxpayer’s account on hold for a specified period, during which no collection action will be taken. However, interest and penalties will continue to accrue. Financial information is required, and a lien may be filed.

6. Offer in Compromise

Taxpayers who cannot pay their full tax debt and are unable to pay through an installment agreement can use this program. OIC allows taxpayers to settle their debt for a lesser amount. Eligibility requirements are strict, and full financial disclosure is necessary.

The Best Payment Plan to Pay Off Delinquent Tax Debt

There is no one-size-fits-all solution for paying delinquent tax debt. The best payment plan for an individual’s tax debt will depend on their specific situation, such as their financial situation, the amount of taxes owed and their ability to make payments. 

It’s advisable to consult with a tax professional in order to determine the optimal payment plan for your unique circumstances.

What Happens If You Fail To Pay Your Tax Debt

Failure to pay delinquent tax debt to the IRS can result in severe financial consequences. The interest on the debt accumulates on a daily basis, much like a credit card balance. Without intervention, the amount owed can quickly double over time due to additional penalties and interest. Don’t wait until it’s too late, take control of your finances now by facing the situation head-on. 

Find Lasting Relief with Peace of Mind Tax Help

Before you enter the daunting maze of IRS regulations, we advise you to contact our office to speak to our tax relief experts.  Even if you haven’t filed tax returns for years, our firm has the expertise and skill to navigate the IRS and help you resolve your tax issues.

If you qualify, we may be able to settle your tax debt, including penalties and interest, for up to 85% off through an Offer in Compromise.

Our team can guide you through the process, and we encourage anyone seeking professional tax advice to contact us in order to find a permanent solution to their problem.

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