What to Do When You Owe Taxes

Posted on December 20, 2021

What to Do When You Owe Taxes

If you owe taxes, resolution is not simple if you cannot pay the entire tax liability in a single payment. Most taxpayers opt for Installment Agreement IRS debt payment plan to pay their tax debt because they have the financial capability to pay the tax debt. The IRS considers the financial condition of a taxpayer before qualifying them for a debt payment plan.

Under Installment Agreement, taxpayers can pay the taxes they owe in fixed monthly installments. Although this debt payment plan sounds convenient, the IRS charges interest on any amount of liability that is yet to be paid even after a taxpayer has begun to pay to the IRS. Along with it, the IRS charges penalty for non-compliance.

Taxpayers can get IRS penalty reduced or forgiven with the help of tax lawyers such as tax attorneys and enrolled agents. Most tax resolution companies use the services of many tax experts including tax lawyers and tax analysts. Their job is to analyze, prepare and negotiate a tax case with the aim to achieve the most favorable resolution for the taxpayer.

If you owe taxes and are financially capable of paying it in installments, Installment Agreement is the plan to choose. Remember that applying for a debt payment plan that you clearly do not qualify for may attract penalty by the IRS. For effective resolution that works in your favor, it is wise to use the services of a tax help.

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