What To Do If You Owe the IRS
So you receive a letter from the IRS in the mail and they have figured out that you have been less than truthful when filing your tax returns. They have recalculated your tax and now you have a bill. Or maybe, you filed your return on time, but did not have the funds to pay the amount due to the IRS. If you are like many of the people with IRS tax issues, you likely want to run and hide – hoping the problem will go away.
We see this very often and I am telling you that your problem will not go away on its own. You need to face it and take steps to resolve your IRS debt.
The first step is making sure your tax returns were filed correctly, and you need to know how much you owe the IRS for all years that are unpaid.
The IRS offers installment payment plans depending on the amount you owe. This option allows you to pay your overdue tax bill monthly until it is paid off.
If you have a large balance due and you cannot afford to pay it back, you may consider an Offer in Compromise. This is an option for people who truly cannot and will not be able to pay off their debt in the near future. If the IRS accepts you into this program, you will agree to pay a smaller amount of tax to settle the debt. This sum is usually paid in one lump sum, but may be spread over a few payments.
Honorine M. Campisi, CPA