What to Do When You Owe the IRS
Owing money to the IRS can be stressful. But there are steps you can take to manage the situation. Here’s what you need to know.
Understand Your Tax Bill
First, make sure you understand why you owe money. Review your tax return and any notices from the IRS. If you spot any errors, contact the IRS to resolve them.
Keep all your documents organized. This includes your tax return, any IRS notices, and your payment records. Having everything in one place will make it easier to manage your payments and communications with the IRS.
Contact the ways to get in touch, including phone and online services.
Payment Options
The IRS provides different payment options. You can pay in full or set up a payment plan. If you can’t pay in full, consider an installment agreement. This allows you to pay your debt over time.
Explore Other Solutions
In some cases, you might qualify for an Offer in Compromise. This is an agreement with the IRS to settle your debt for less than the full amount. To qualify, you must meet specific criteria and provide detailed financial information.
Another option is to request a temporary delay in collection. If the IRS agrees, they will review your situation periodically to see if your financial situation has improved.
Seek Professional Help
If you feel overwhelmed, consider hiring a tax professional. They can help you understand your options and deal with the IRS. A tax professional can also represent you in negotiations and ensure you meet all deadlines.
