Paying one’s annual federal income taxes is a burden that many wish they could avoid. However, if a Texas resident owes money to the Internal Revenue Service then they should make an effort to satisfy the amount due as quickly as possible. Penalties and fees can attach to an outstanding tax bill if it is not addressed by the responsible party.
However, not everyone who owes money to the government has the ability to pay what is due on time. Circumstances of life can prevent a responsible individual from having enough money on hand to pay their tax bill by the time it is due. The IRS recognizes this and offers several payment installment agreement options to individuals.
One option is the guaranteed installment agreement. To qualify for it, a person must owe less than $10,000 and must be able to pay off their full tax bill within 3 years. If a person has not filed their taxes at any point in the prior 5 years or has unpaid tax bills from prior years, they may not qualify.
If an individual does not qualify for the guaranteed installment agreement, they should know that the IRS offers other installment agreement plans that may better fit their situation. For example, if their tax obligation exceeds $10,000 or if they may need longer than 3 years to pay off their bill, they may be able to establish a streamlined installment agreement to manage their tax liability.
This post does not provide any legal or financial advice to its readers and those who owe money to the IRS should consult with legal professionals about their options for satisfying their tax liabilities. Proactive steps taken to address a formidable tax bill may save an individual, stress, time, and money.