If you`re struggling to pay your taxes, the IRS offers several options for repayment, one of which is an installment agreement. This allows you to pay your tax debt over time in manageable monthly payments, rather than in one lump sum.
However, what happens if you can`t keep up with those monthly payments? The answer is that it depends on your specific situation.
First, it`s important to note that if you miss a payment, the IRS will send you a notice of default. At this point, you have 30 days to get back on track before the IRS takes further action. If you don`t take any action within that time, the IRS may file a Notice of Federal Tax Lien, which is a legal claim against your property.
If you still can`t make your payments after receiving a notice of default, you have a few options. One is to renegotiate your installment agreement with the IRS. You may be able to change the amount of your monthly payments or the length of your repayment period. Keep in mind, however, that the IRS may charge fees or penalties for renegotiating your agreement.
Another option is to request a temporary delay or a partial payment installment agreement. A temporary delay allows you to postpone your payments for up to 120 days, while a partial payment installment agreement allows you to pay less than the full amount you owe each month, based on your current financial situation.
Finally, if you still can`t pay your taxes and you don`t have any other options, you may be able to settle your debt for less than the full amount owed through an offer in compromise. This is a complex process that requires careful consideration and negotiation, and it`s not always a viable option.
In general, it`s important to communicate with the IRS if you`re having trouble making your payments. Ignoring the problem will only make it worse, and the IRS has the authority to take legal action if you don`t comply with your installment agreement. By staying proactive and working with the IRS, you may be able to avoid more serious consequences and find a solution that works for you.