If you owe back taxes to the IRS and can’t pay in full, you have options like payment plans and settlement offers. Understand the rules to get the optimal arrangement.
You can set up an installment agreement to pay over 6 years. But only one plan is allowed, and interest/penalties continue. Plans under $50k are easily approved, over $50k get more scrutiny of your finances.
If you owe over $25k, payments must be via direct bank debit from the IRS. Under $25k allows check/online payments. There are also fees to establish the payment plan.
If the 6 year payoff seems unrealistic given your situation, you can propose a reduced settlement offer. But acceptance rates are low and the IRS expects you to have minimal assets left.
Overall, take action to address IRS debt rather than ignoring it. Explore payment plans or compromise offers based on your circumstances. Don’t let it spiral out of control.
