Once again, the tax man is at your door! You owe the IRS tax money. Unfortunately, you don’t have that money in pocket. It’s important to understand why you are in this dilemma. The problem is that you owe the IRS or New York State and can’t pay.
Taxes are supposed to be easy to repay; yet when your taxes owed become more than what you have in the bank, that becomes a big problem. Some of the reasons for the tax debt is that you earned more money and found yourself in a higher tax bracket, or you might have over-committed yourself such that your paycheck is too little to offset your taxes.
You must have a definitive plan on how you are going to achieve the goal of resolving your tax debt with the IRS or New York State.
What are some of your options?
Apply for an Offer in Compromise (OIC)
It is a covenant between you and the IRS. It spells out how you can settle the amount owed for less than the total sum. To be eligible, you must have done your current quarter estimates and filed your current returns.
The IRS will accept your offer when there is a genuine reason as to why you cannot pay the full amount. When there is doubt as to your ability to collect the actual amount owed, or if there is a promise of efficient tax administration and that the full amount is recoverable over time, IRS can consider your case.
Pay in Monthly installments
Monthly payments is an option to apply if you’re unable to pay New York State and can’t pay your tax debt in full. You will be required to have filed all the required tax returns to be eligible. You must also owe less than $50,000 dollars in total. One of the advantages of this option is that you can pay online leaving you with enough time to raise the money. You can set up a Payment Agreement Plan in line with the NY state tax payment plan.
Apply for Currently Not Collectible (CNC)
When it is not possible to collect on a monthly installment or an offer in compromise has failed, one can apply for Currently-Non-Collectible status. The IRS will suspend all the collections and enforcement activity temporarily, usually for thirty days. Any levies collected will be released if you qualify for the CNC. Consider this as an option.
Innocent Spouse Relief
If you happen to inherit your spouse’s IRS tax problems, you do have a way out. You have to be able to prove that your situation fits the IRS guidelines for innocent spouse tax relief. If you are successful doing so, you may not be subject to the taxes caused by your spouse or ex-spouse.
If you’d like to know more about how we can help you resolve your tax problem, call us for a FREE Tax Help Consultation at (855)829-8477