OK, so you've filed your taxes or are about to and realize you will owe the IRS and aren't in a place to pay the amount in full. So what should you do? The wrong answer is to do nothing - ignoring the problem will more than likely result in it getting worse over time and increase the time and cost of fixing it. The correct answer depends on your specific circumstances. Here are some of the factors that go into determining what is best for you:
Have you owed the IRS in the last several years?
How much will you owe? Does that include the interest and penalties that will be assessed for failure to file or pay on time?
What is your current financial situation? Many taxpayers are struggling due to the economic effects of Covid-19.
Are you currently employed?
Are there any particular circumstances that caused the inability to pay your balance in full?
Do you need to avoid a Notice of Federal Tax Lien being filed against you?
Sometimes the best option is a payment plan for a specific period where you pay the IRS a set amount every month, but often it isn't, and there is a better solution that will cost you less in the long run. An installment agreement can often feel like you're spinning your wheels because as you pay down your balance, it continues to accrue interest which slows the progress you're making with those monthly payments. There are situations where a payment plan is used as a short-term solution to stabilize collections, but other actions need to be taken to resolve your IRS issues fully.
Can't I call up the IRS and "work something out"? You can, but I don't recommend it. You will probably get someone who isn't going to inform you of all your options, getting the most favorable solution for the IRS. You need someone on your side who knows your rights and what you're entitled to. We are passionate about helping our clients get the relief they deserve from their IRS problems!
Suppose, in your situation, an installment agreement is the best option. In that case, you may be able to get relief from interest and penalties, thereby reducing the amount you eventually pay back to the IRS. The first step that we take with every client is to perform a detailed review and analysis of the IRS records, and then, based on our research, we meet with you and recommend a course of action that best resolves your tax problem for you and not the IRS.
Schaffer Herring’s tax resolution team is ready to help you navigate the complexities of your tax problems. When you are prepared to get started, give us a call at 918-743-6116 or email us at [email protected] to discuss.