IRS Back Taxes Payment Procedure

Posted on March 14, 2022

IRS Back Taxes Payment Procedure

Being in tax debt can be worrying because the IRS can anytime begin the collection process if no efforts for resolution are made by the taxpayer. Financially, a tax debt is strenuous because a taxpayer’s debt amount increases over time due to interest the IRS charges monthly.

IRS Debt Payment in Full

If the amount of back taxes is small, a full payment of the entire debt is the smoothest and fastest way to resolve the debt. When paying in full, taxpayer’s should determine the total amount of debt owed by calling the IRS. Taxpayers may contact the IRS on 1-866-681-4271 and request information from them about the exact amount of taxes owed. Remember, the IRS will continue to charge penalties and interest on back taxes as long as they remain unpaid.

Payment through IRS Debt Payment Plans

When the amount of back taxes is too big to pay in full, taxpayers have the choice of choosing a debt payment plan to pay back their IRS debt. There are many payment plans, such as an Installment Agreement, Currently Not Collectible, and a Partial Payment Installment Agreement.

If a taxpayer applies for an IRS debt payment plan they clearly do not meet the qualifying factors of the plan the IRS will assess a penalty on their current debt amount, so taxpayers must choose carefully.

For example, if a taxpayer has the ability to pay the entire debt amount, but not in lump sum, s/he cannot choose an a Partial Payment Installment Agreement, or Currently Not Collectible, where debt reduction or the postponement of payment is allowed.

IRS Debt Payment Using Help

Legal representation is recommended in cases where taxpayers cannot pay their entire tax debt amount in a single payment. IRS debt payment plans can be adjusted according to the particulars of a case. Tax attorneys ensure taxpayers get the most favourable resolution under a debt payment plan, which can include a reduction in their debt amount, a reduction of penalties, and the forgiveness of the debt, or an extension of time to pay the debt.

Tax debt resolution can be straightforward. Under IRS debt payment plans, a resolution needs legal help for negotiations with the IRS. Whichever method taxpayers choose is their discretion, but a delay in payment is certainly not in their best interest.