IRS Payment Plans
Few things are more worrisome to taxpayers than realizing that they are unable to pay the full amount of their federal tax obligations. While some may feel they have no option but to bury their heads in the sand, hoping that the problem will disappear, others rightly realize that such a strategy will not work for long. The good news is that the Internal Revenue Service offers taxpayers a wide array of options to make paying outstanding amounts easier than many may have thought.
The Baltimore-based tax attorneys of Rosenberg Martin Greenberg,LLP stand ready to guide businesses and individual taxpayers through the process of determining how best to get current on their outstanding tax debt and remain so into the future.
Tax Installment Payments
When an outstanding tax debt is substantial enough to preclude immediate payment, it may be wise to explore the possibility of an installment agreement. Taxpayers who have established a history of timely filing and promptly paying taxes will typically receive IRS approval for an installment plan, provided the bill itself is not greater than $50,000. This option also affords taxpayers the ability to determine the amount of their monthly payment as well as a preferred monthly due date. Business taxpayers must owe no more than $25,000 in payroll taxes and must also have filed all necessary tax returns. Certain taxpayers may even be able to make IRS online payments without having to engage in further interaction with IRS staff.
Consider Making an IRS Offer in Compromise
Taxpayers who have serious concerns about their inability to fulfill an installment agreement due to the sizable nature of their outstanding obligation may wish to explore negotiation of an Offer in Compromise (OIC) with the IRS. In certain cases, the agency may be willing to settle an existing tax debt for less than the total liability. However, the amount proposed by an interested taxpayer must be deemed to be reasonably reflective of his or her ability to pay. There is a great deal more to the equation than simple negotiation, and a thorough examination of the taxpayer's total financial picture will be conducted to determine eligibility for an OIC. Times such as these are when the aid of a skilled tax professional can make all the difference in achieving an outcome that is beneficial to all parties involved.
IRS Payments Made on Credit
Taxpayers who do not have sufficient cash on hand to pay tax obligations in full may be tempted to use a credit card or other type of personal credit line to quickly settle their debt to the government. While this does facilitate immediate compliance, it can also be a very expensive method of paying taxes that overlooks alternative solutions. The IRS has contracted with private companies for the purpose of accepting credit card payments, each of which will charge a fee for payments made. In addition, if credit card balances are not paid in their entirety after the tax bill is paid in this manner, the interest accrued may actually exceed that which would have been charged by the IRS in late payment penalties. The key is to sit down, do the math and determine which tax payment route is most feasible and cost effective given the specific facts at hand.
Benefits of Consulting with a Maryland Tax Professional
When it comes to managing unanticipated or unmanageable tax bills, the best course of action is to avoid receiving them in the first place. Careful tax planning now can result in reduced tax obligations going forward, something every business and individual taxpayer can appreciate. With the help of skilled tax professionals, liabilities can be lowered, deductions maximized and advantageous strategies put into place. The team at Rosenberg Martin Greenberg possesses the background, knowledge and negotiation experience necessary to secure a positive outcome for clients throughout Maryland.
If you are interested in learning more about alternative IRS payment plans for which you may be eligible, contact Brian J. Crepeau at firstname.lastname@example.org or 410.649.4981.
Additional IRS Payment Resources:
- Internal Revenue Service, Payment Plans, Installment Agreements, https://www.irs.gov/individuals/payment-plans-installment-agreements
- Internal Revenue Service, IRS Offers New Cash Payment Option, https://www.irs.gov/uac/newsroom/irs-offers-new-cash-payment-option
- What happens when you can't pay what you owe the IRS, http://money.cnn.com/2015/04/13/pf/taxes/irs-payment-plans/
- U.S. News & World Report, What to Do If You Owe the IRS But You Can't Pay, http://money.usnews.com/money/personal-finance/articles/2015/04/16/what-to-do-if-you-owe-the-irs-but-you-cant-pay
Talk to a Baltimore Tax Attorney Today
If you are seeking counsel for a tax related legal matter, contact the Rosenberg Martin Greenberg Tax Controversy experts.
Tax Controversy News
Collection: Expatriation with No Tax, Interest or Penalties: New Relief Procedures for Certain Former Citizens
This article was originally published in the Journal of Tax Practice and Procedure, August – September 2019 edition. Introduction On September 6, 2019, the Internal Revenue Service (IRS) announced the new “Relief Procedures for Certain Former Citizens” (IRS Relief Procedures) who relinquished their United States (U.S.) Citizenship after March 18, 2010.1 Under the new IRS Relief Procedures,…
A collection letter from the IRS is not necessarily bad news, but the recipient’s response can turn that letter into a negative experience. The worst reaction would be to ignore the message. The better course of action is to consult with a tax attorney who can help you develop an appropriate response. The tax lawyers…
If you make quarterly estimated tax payments on income that you receive from freelance services, stock dividends, or rental properties, you want your estimates to be as accurate as possible. If you overestimate your tax obligation, you give the government an interest-free loan, but if you underestimate that liability, you may be required to pay…