How to Negotiate Back Tax Payments With the IRS?

The Internal Revenue Service or IRS is responsible for administrating the Internal Revenue code of the United States. IRS assesses the taxpayers’ income tax returns and scrutinizes the ones who violate the tax code. In recent years, the IRS has become generous towards late taxpayers and made efforts to negotiate tax debt payment plans. However, if you wish to avoid IRS inquiries, you should be proactive with your tax return filings and payments. If you have missed out on your income tax return filing deadline, you should look for IRS settlement lawyers who can help you prevent IRS inquiries.

Here are the things taxpayers should do to negotiate Tax payment with the Internal Revenue Services

  1. Always File Your Return

The first thing that every taxpayer should do is file income tax returns. IRS is amicable towards struggling taxpayers who file their returns promptly. If your income tax filing date is approaching, but you are in no position to pay the tax amount, you should file the income tax return. Doing so will prevent you from incurring IRS penalties and fines. The penalty for not filing the return is usually more than what a taxpayer owes to the government. 

  • Explore Options for Late Payers

While your tax law attorney will surely advise you not to reach a point where the IRS has to send you a notice, you should not waste time responding to the first back taxes notice.

Taxpayers have three options to repay their taxes:

•             The taxpayers enter an installment agreement wherein they pay the debt tax in installment.

•             The taxpayers apply for an offer in compromise wherein the taxpayer pays a reduced amount in one single payment.

•             The taxpayers request the IRS to delay the tax collection process till their financial condition improves.

It’s essential to mention that the penalties and interest on unpaid tax keep accumulating until the entire debt is paid. Thus, requesting a temporary delay in collecting the tax will lend you more financial troubles.

  • Consider Installment Agreement

Most IRS settlement lawyers agree that an installment payment plan is one of the best options to pay delinquent taxes. To have a better chance at getting approved for an installment payment agreement, you should keep certain things in mind.

•             Let the IRS know that you will pay the debt within a certain period. Ideally, the installment plan spans over three years.

•             Ensure that the monthly payment you offer against your debt should be higher than what the IRS has estimated.

•             The monthly tax payment plan should comply with the IRS criteria.

  • Stick to Your Payment Plan

You must stick to your payment plan and not miss out on any payment date. Violating the terms of your installment agreement can provoke the IRS to take strict against you. The IRS may seize your bank accounts, property, etc.

If you cannot stick to your installment schedule, you should address this problem to the IRS. Being transparent and open with the IRS is crucial when it comes to negotiating with them.

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