No one likes hearing they owe taxes, but if your financial situation is tight, coming up with the amount owed in one lump sum is a particular challenge. Working with IRS representation will help you understand what to expect while also giving you the tools and advice you need to reach a payment agreement. Below, the team at Selph and Friday CPA in Texarkana, TX, explains a few of the IRS-approved options available to you and your family.

What to Do When You Can’t Pay Your Taxes in Full

Set Up a Payment Plan

The IRS understands that some people find themselves in situations wherein paying the full amount of taxes owed is not feasible. For these individuals, they’re willing to set up a payment plan to help break up your balance into monthly installments. As long as you owe $50,000 or less and have filed your tax return, you should be eligible for a payment plan.

Establish an Offer in Compromise

If paying the full amount of taxes owed would place undue strain on you and your family, you may be eligible for an offer in compromise. This option allows you to settle your debt for less than the full amount owed. Working with your IRS representation team, you’ll be expected to prove that full payment, even in monthly installments, would create a financial hardship for your family. 

Delayed Collections

The IRS will review your account to determine whether or not you can reasonably be expected to make payments given your current financial situation. If they decide that you cannot afford to begin paying up your taxes owed, they may offer to delay collections for a specified period of time. However, it’s important to keep in mind that they will assess interest on the amount of taxes owed and the duration of delayed collections.

If you are struggling to pay off your balance, there are ways to reduce the financial strain. The experienced professionals at Selph and Friday CPA have an in-depth understanding of the lRS, and state and local tax agencies. Their capable team will guide you through the process to determine your options and whether you qualify for a settlement. Contact them today to discuss IRS representation by calling (903) 792-0281 or visit their website to learn more about the services they provide.