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What to Do When You Have Delinquent Taxes

Failing to pay required taxes by the filing deadline makes you delinquent and could result in devastating consequences. If you owe back taxes, there are routes you can take to reach an agreement with the IRS and work toward settling your debt. It is imperative to act quickly and explore your options with a professional to determine what will be most beneficial in your situation.

Consequences of Failure to Pay Back Taxes

When you owe money to the government, you face serious penalties that could worsen your situation. The IRS will assess fees and interest to your debt, increasing the amount you owe. The agency will also contact you, demanding payment. If you do not respond, the IRS will issue a lien on your property, which means they can take control of your assets and sell them to recover funds for the amount you owe.

Measures You Can Take

You can take certain actions to avoid facing consequences that could further harm your finances or your property.

If you believe the amount you have been contacted about is incorrect and your letter states you have the right to appeal, you can dispute the amount by filing a written protest with the IRS Office of Appeals. Generally, you have 30 days to file your dispute. You must send Form 12203, Request for Appeals Review, along with a written statement that details your request and the reason for the appeal.

Appealing the Amount You Owe

If the delinquent amount is correct, there are other agreement options available to help you make payments to the IRS. These include an installment agreement, an Offer in Compromise, and a delay in collection.

Filing for an Installment Agreement

An installment agreement allows you to make monthly payments on your debt until the amount is paid in full. This agreement is available for individuals who owe less than $50,000 and can pay off the delinquent amount within 6 years. You can apply online using the Online Payment Agreement tool or through the mail by submitting Form 9465, Installment Agreement Request. The IRS will review your situation to determine if you qualify.

If you owe more than $50,000 or will not be able to settle your debt in 6 years, you and a professional can work with the IRS to discuss other installment options.

Filing for an Offer in Compromise

The Offer in Compromise (OIC) is another option. This allows you to make a lump sum payment for less than your delinquent amount. To be eligible for the OIC, you must file all your tax returns and be current on estimated taxes you owe for the year. You can use the IRS’s Offer in Compromise Pre-Qualifier tool to see if you meet the criteria. When you file for an OIC, the IRS will thoroughly review your situation, looking at various factors to determine if you qualify.

Requesting a Delay of Collection

You can also request a delay of collection. With this option, the IRS will notate your account as “not collectible” and will not attempt to recover funds from you until your financial situation has improved. You are required to complete a Collection of Information Statement and provide proof of your financial situation. The IRS will review all your information to determine if you qualify for this option. A delay of collections does not mean your debt is satisfied; you will still owe the full amount, plus fees and interest that accrue while your debt remains.

Call Eagleton, Eagleton & Harrison to Discuss Your Tax Matters

We are committed to providing sound legal guidance for individuals facing tax issues. If you owe delinquent taxes, our attorney will assess your situation and discuss your options to help resolve tax problems. We have extensive experience in tax law and are highly capable of handling complex tax law matters.

Call us today at (918) 584-0462 or contact us online to schedule a consultation.

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