You got that dreaded letter from the IRS. They want money! What can you do? Well, here are your choices……
- (IA) Installment agreement, This is available to those that do not have the ability to pay their taxes in a lump sum but can make monthly payments. If you owe less then $25,000 your chances are good the IRS will accept your request.
- Currently not collectible, You may be granted this if you do not have the means to pay the taxes owed. This is a temporary pause. The IRS will continue to monitor your situation. If it improves they will start the collection process back up.
- Offer in Compromise, the IRS will need proof that it is not worth their time to try to collect from you.
- You may apply for this if there is any doubt the amount you own is not correct
- Doubt you will ever have the money to pay this
- Effective tax administration - you do not deny you owe the tax, however, if it were collected it would be unfair or inequitable because it would create financial hardship. Typically, when an Offer in Compromise is granted under this requirement it is for the disabled and elderly.
- You will have to submit 20% of your offer with your request. If your request is not granted the amount you pay will be used as a payment on the amount you owe.
The IRS has 10 years to collect any amount that is owed to them.
Allowable expenses include: