What should you do if you owe the IRS money?

Many Americans do not make full payments to the Internal Revenue Service (IRS) when they initially file their taxes. As a result, they will likely receive a bill or notice from the IRS notifying them of any amounts still owed and requesting payment. If you receive a notice from the IRS, it is important that you do not ignore it and respond when asked to do so.

If you find that you owe money to the IRS, but cannot pay in full, you have a few options. First, you can work out a deal to make monthly installment payments to pay off your bill, typically within three years, plus interest. You can also make an offer in compromise, essentially asking the IRS to consider a smaller payment as payment in full. The IRS then has the option to accept or deny your offer.

In certain situations, you may apply for a hardship suspension to give you additional time to pay. However, with a hardship suspension, the IRS will continue to review your account to see if you are able to pay, and interest will continue to add up. Some people may also find that filing for Chapter 7 bankruptcy is their best option. Bankruptcy can potentially discharge the debtor from certain taxes entirely or allow them to make monthly installments with little to no interest.

It is important to note that under IRS tax law, tax collectors have a lot of options to collect money from taxpayers who do not pay what they owe including filing a tax lien against you, garnishing your wages, or seizing your property. An attorney specializing in tax law can help ensure that you take the necessary steps to keep the IRS at bay.