There are a few options for resolving outstanding taxes, notwithstanding the agency’s inability to be contacted by phone. “The IRS is willing to cooperate with you,” Collins stated.
1. The first step is to sign a contract for instalments.
A long-term monthly payment plan may be an option for those who cannot afford to pay the entire sum.
If you owe less than $50,000 in total, including tax, penalties, and interest, you may be eligible for the plan. However, the IRS will not approve the plan if you have unfiled returns.
To prevent defaulting on your agreement, the Taxpayer Advocate warns that you must agree to an acceptable monthly payment and pay future taxes on time.
You can apply online, over the phone, or by a bot, according to Collins, who claims it takes little time at all.
2. Make a concession in order to reach an agreement.
Offering less than you owe is another alternative known as an offer in compromise. Although the IRS advises people to look into “all alternative payment choices” first, taxpayers should do so.
Depending on your financial situation, Collins said, you may be able to get your tax debt settled and go on with your life more quickly.
To be eligible, you must be current on all returns, unless you have a valid extension on file, and you must make all required estimated tax payments on time.
This tool can be used to determine whether or not you are eligible for the Offer in Compromise Booklet’s pre-qualification process.
3. Presently there is no market for it.
Collins clarified that the IRS may take a break from collecting delinquent debts if the balances are “currently not recoverable” for a while.
Although the Taxpayer Advocate says that even if your application is approved, your existing debt may still incur fines and interest, and the IRS may take your future returns in order to satisfy the sum, And you’ll be held liable for any future tax liabilities.
There are a number of ways in which you can prove your financial hardship and inability to pay, including submitting past due tax returns and other documentation such as a Form 433-A, 433-F, or 433-B.