Tax Dictionary – Tax Debt Relief
If you cannot pay the IRS now, certain options may be available:
- Meet your tax obligation in monthly installments by applying for an online payment agreement
- Find out if you qualify for an offer in compromise – a way to settle your tax debt for less than the full amount
- Request that we temporarily delay collection until your financial situation improves
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If you have IRS tax debt that you are unable to pay in full, you may have several options for relief.
If you can’t pay the amount due in full and you can make monthly payments, you may qualify for a payment plan (installment agreement.) You can request an installment agreement online using the IRS Online Payment Agreement tool if you owe $50,000 or less and can pay the balance due in full within six years.
If you cannot make any payments at all due to your current financial situation, you may qualify for currently non-collectible status which is a temporary delay in collection until your financial situation improves. You will need to complete Form 433F, Collection Information Statement, and submit a letter requesting currently non-collectible status. If you qualify for this status, the IRS will expect you to begin paying on your unpaid balance once your financial situation improves.
If you will not be able to pay your balance due in full under any circumstances, you may qualify for an offer in compromise. You will need to complete Form 656, Offer in Compromise and Form 433A (OIC), Collection Information Statement for Wage Earners and Self-Employed. You will need to determine the maximum amount you are able to pay. If you qualify for an OIC, the IRS will settle or reduce the amount of your tax debt if you file and pay your taxes by the due date for the next five years.
Get the facts from H&R Block about how long the IRS has to collect back taxes, and when the IRS can extend the collection statute expiration date (CSED).
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Get the facts from H&R Block about the refund statute expiration date (RSED). Read the IRS definition and get more insight from the experts at H&R Block.