Tax day came and went, but you couldn’t pull together the money you owed the IRS. What happens now? How long until the IRS takes your paycheck as payment?
Your paycheck is safe for now, don’t worry. The process to reclaim overdue taxes takes a while.
Spend your time preparing to negotiate with the IRS about the taxes you owe, instead. Any delay in the process results in a larger bill due to the failure-to-pay penalty.
Learn how to negotiate with the IRS to lower your final payment. You could end up debt-free in 3-6 years if everything goes right with the negotiations.
What Is the First Step When Negotiating With the IRS?
To ensure you know how much in taxes you owe in total, file every return. Keep detailed records, including what you owe for each year. You don’t want to find any surprise back taxes when negotiating with the IRS.
The next step involves paying any amount you can toward your back taxes. A good-faith payment goes a long way toward generating trust with the IRS. If they see you making an effort, they’re more likely to work with you during negotiations.
Should You Negotiate With the IRS Yourself?
You can negotiate with the IRS yourself, with a few conditions. If you don’t think you can meet these conditions, bring in someone else to negotiate. You don’t want to miss any important fees or filing deadlines during the process.
If you want to negotiate yourself, learn IRS terminology about the repayment process. This way you’re all using the same terms and there’s no confusion. It also lets the IRS know that you’re serious about paying your back taxes.
Be honest during every step of the process, even when you’re overwhelmed. You may find out your tax problems are worse than you thought. Don’t be afraid to tell the IRS you need to step back and consult a tax lawyer.
What Not to Do When You Negotiate With the IRS
Try not to pick a repayment option you cannot fulfill within a reasonable time-span. Breaking the agreement means you may lose your home and financial assets.
Your options for how to reduce taxes owed to IRS:
- Installment agreement
- An offer-in-compromise
- A temporary collection delay
Of the options available, the payment plan is the best for most taxpayers. Don’t try to offer low payments and drag out the repayment schedule. The IRS can deny your agreement request if they don’t like the terms.
A temporary delay adds money to your payment through interest and penalties. Use this option only if you owe a little bit and have money coming in soon.
If you negotiate an offer in compromise with the IRS, it cuts down your full debt. The catch is you must pay the back taxes in a lump sum.
Negotiate With the IRS and Free Yourself From Debt Sooner
Tax debt can ruin your career and leave you without a place to call home. Before the IRS sends their collections team after you, make a compromise.
Negotiate with the IRS to lower your debt and pay it off in a few years. Remember to remain honest about your financial situation.
Looking for more ways to regain control of your life? Browse through our articles for helpful self-improvement tips.
