Three Possible Options to Take if You Owe the Government Money

For people who never owe money doing taxes to them is nothing more than filling out a sheet of paper and waiting for a check, but if you usually owe money it’s nothing but stress and worry.  This problem gets worse if you end up owing several years of back taxes, and that scenario is a lot more common than you’d think.

When some people think of taxpayers who owe the government money they think about wealthy business owners who have been purposely hiding money away, but in reality, that’s rarely the case.  People from all walks of life can owe the government money, and if you don’t make a lot, paying off the debt can take a while.  If you owe the government  taxes there are certain things you can do that can help make paying off your debt easier.

Installment Agreement

An installment agreement is essentially a payment plan you schedule with the government. This option is simple, but in order to qualify you have to meet certain requirements:

Offer in Compromise

This may sound strange, but it actually is possible to work out a deal with the IRS about the amount of debt you pay back.  In order to  get this, the IRS must doubt that you can ever reasonably pay back the tax debt you owe.  The offer in compromise isn’t easy to get, and you should consult an experienced tax debt consultant if you’re serious about filing for this. 

Be Declared as “Currently Not Collectible”

If you can send the IRS credible evidence that proves that you have no ability to pay your debt, they may declare you as “currently not collectible”.  Once the IRS declares a taxpayer as currently not collectible, the IRS must stop all collection activities, which includes all levies.The IRS will still send an annual statement to the taxpayer, but that form is just for the taxpayer’s records. 

*not a solicitation for legal services*