IRS debt is a burden for any taxpayer. The first problem that encounters any taxpayer who is under IRS tax debt is to understand how to pay it back. Although the IRS includes the details of how to pay back the tax debt in the IRS notices it sends to taxpayers who owe them taxes, they do not reveal how to minimize IRS tax debt, remove or reduce penalties and extend the deadline for the payment of tax debt.
The IRS prefers to get the entire tax debt amount in a single payment. Those taxpayers who can pay the amount in full can contact the IRS and pay the amount due. But most taxpayers find themselves in one of these situations:
- They can pay the tax debt amount partially.
- They cannot pay any amount of tax debt.
- They can pay the tax debt, but not in a single payment.
- They might be able to pay it in future, but cannot pay it now.
Depending on the financial circumstances of a taxpayer, they can choose one of the IRS debt payment program. The IRS has four major debt payment plans namely Installment Agreement, Offer in Compromise, Currently Not Collectible and Partial Payment Installment Agreement. Taxpayers may choose a tax payment plan that is appropriate for them.
When choosing an IRS tax debt payment plan, taxpayers must keep in mind that the IRS charges interest and penalties on any IRS tax debt amount that remains to be paid. If taxpayers delay the paying of the tax debt, they will need to pay more to the IRS because of added interest. Therefore, taxpayers are advised to resolve their tax debt issue as soon as possible.