| Not being able to pay the taxes you owe is probably a | | | | to prove that you are in a bad financial position and |
| more common situation than you realize. Ever year | | | | you cannot make the required monthly payments with |
| there are literally thousands upon thousands of people | | | | a normal installment agreement. |
| that are in similar shoes as you. Although this is a bad | | | | 3. IRS hardship. Can you prove that you are facing a |
| spot to be in, it is not the end of the world. There are | | | | hardship? If so, the IRS may put your account into |
| many ways that you can better your situation. The IRS | | | | uncollectible status for the time being. This means that |
| actually is willing to work with you to find a solution. | | | | they will not come after you for the money that you |
| The IRS has been dealing with situations like this for | | | | owe. Receiving this status only happens when you can |
| years and have made various types of resolutions to | | | | prove that you will not be able to pay now or in the |
| try to match every taxpayer in any type of financial | | | | near future. This does not mean you will not be |
| situation. It is important to understand your various | | | | required to pay back your taxes, the IRS will check |
| options so you can resolve your taxes in a way that | | | | back after a period of time has passed and check to |
| benefits you financially. | | | | see if your financial situation has improved enough to |
| Here are four options to consider if you cannot pay | | | | allow them to collect. |
| taxes: | | | | 4. Offer in compromise. Do you want to settle your |
| 1. Installment agreement. You may not have enough | | | | debt for pennies on the dollar? This is when an offer in |
| money to pay your taxes in one lump sum this is | | | | compromise comes into play. This allows you to settle |
| common. The IRS knows this, so they offer the ability | | | | your tax debt for less than what is actually owed. The |
| to pay your debt over an extended period of time. In | | | | offer in compromise settlement method is not for |
| most cases, the longest period of time that you will be | | | | everyone, only about 10-15% of all offers are |
| granted is 60 months or five years. This is a good | | | | accepted. You must prove to the IRS that the amount |
| option for taxpayers that have stable jobs or income, | | | | you offer them in the settlement is equal to or greater |
| but just don't have enough to pay off the taxes in full | | | | than the amount they would ever expect to collect |
| on the due date. This is the most common method for | | | | from you. The IRS did just announce (February 2010) |
| taxpayers to pay back taxes if they can't pay in full | | | | that they are going to make it easier to for taxpayers |
| and it is one of the easiest methods to get accepted. | | | | to settle their taxes through this method and |
| 2. Partial payment installment agreement. With this | | | | It is important to keep in mind that if you cannot pay |
| option you are still paying your debt every month in | | | | your taxes, it is important to work with the IRS to find |
| small increments. The main difference between this | | | | a resolution. Ignoring your problem will only make it |
| plan and the one detailed above is that you may end | | | | worst by adding on additional penalties and interest |
| up paying less than your total liability when all is said | | | | that could have been avoided. The IRS will work with |
| and done. Not everybody will qualify for a partial | | | | you and there is a solution to your problem. |
| payment installment agreement. You need to be able | | | | |