Tax Payment Plans

What to do if You Can’t Pay Your Income Taxes


Not being able to pay your income taxes to the Internal Revenue Service or New York State is not a good situation to be in, but many people find themselves with tax liabilities and unsure what to do. The IRS can be seen as a large bureaucratic entity that can garnish wages, seize bank accounts, and put liens on property. However, the IRS is mostly reasonable, and can work with you as well, if you have the correct legal advice. The following are suggestions from a New York Tax Attorney, who has experience working with the IRS, the New York State Tax Department and his clients to find the best solutions to relieving tax problems.

Additional Time to Pay

You can ask the IRS for more time to be able to pay your taxes. The IRS may grant 60 to 120 additional days for the taxpayer to pay. However, in these cases were tax relief provides additional time, you must pay in full.

Installment Agreements

An installment agreement is a way to pay income tax off over time. If you can pay some extra funds out of your paycheck, but are not able to pay your taxes in full, an installment agreement is the best option. Depending on the type of agreement that you qualify for and what is agreed upon, the IRS may allow up to 10 years to pay off your tax liability.

Credit and Debit Cards

The IRS now accepts credit card and debit card payments for taxes owed. The IRS does not charge a fee for these transactions, but the company that processes your payment will likely charge a ‘convenience fee’ or a ‘flat fee’ for this tax relief.

Offer in Compromise

If your chances of paying off your debts with the IRS or the New York State Tax Department are unlikely based upon their calculations, you can make an Offer in Compromise. If, through seeing your financial situation, the IRS feels that you cannot fully pay your tax liability, they may be willing to settle debts for less than the full amount owed. An Offer in Compromise is generally for taxpayers who have back taxes that amount to a number so large that the taxpayer is unable to pay. In those cases, an offer in compromise is a great solution.

Taxpayers do not always acknowledge that the IRS can help. The system and tax code can be difficult, but are not unmanageable and can be used to your advantage to obtain tax relief. Having a Tax Attorney can help you work with the IRS and the New York State Tax Department for the best results possible.

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