If you do not pay your tax in full when you file your tax return, you will be issued a bill for the amount owed. This bill initiates the collection process, which will continue until your account is satisfied or the IRS is no longer permitted to collect the tax, such as when the time or period for the collection expires.

From Billing To Collection

You file your tax return. The majority of returns are filed either annually by April 15 or quarterly (businesses with employees).

  • If you owe taxes, the IRS will send you a bill. This is your first bill for tax due. Based on your return, the IRS will calculate how much tax you owe, plus any interest and penalties.

  • If you don’t pay your first bill, the IRS will send you at least one more bill. Remember, interest and penalties continue to accrue until you’ve paid your full amount due.

  • If you still don’t pay after you receive your final bill, the IRS will begin collection actions. Collection actions can range from applying your subsequent tax year refunds to tax due (until paid in full) to seize your property and assets.

Options If You Can’t Pay In Full Now

Installment Agreement

If you can’t pay the full amount at once, the IRS will allow you to make smaller periodic payments over time by applying for an Installment Agreement. To be eligible for an Installment Agreement, you must file all required tax returns. A setup fee applies to all agreements over 120 days. With an Installment Agreement, you can pay by direct debit, through payroll deductions, electronic funds transfer, or by check. If you need some tax assistance, check out the IRS Fresh Start Program.

Offer In Compromise

If you are unable to pay your debt in full or in installments, you may be eligible for an Offer in Compromise. By requesting an Offer In Compromise, you’re asking to settle unpaid taxes for less than the full amount you owe. You must file all legally required tax returns, make all required estimated tax payments for the current year, and make all required federal tax deposits for the current quarter before the IRS can consider your offer. The IRS Fresh Start Program provides different options for your tax situation such as OICs.

Currently-Not-Collectible Status

If you require additional time to pay, you may request to postpone the collection process and report your account as Currently-Not-Collectible status. If the IRS determines that you’re unable to pay off any of your tax debt because of financial hardship, the IRS may temporarily delay collection until your financial situation improves. Being on CNC status doesn’t mean the tax debt disappears, your tax debt continues to accrue penalties and inter est until the debt is paid in full.

Collection Process Overview

If you are unable to pay your taxes, the most important action you must take is to pay your amount in full but in a case where you cannot, you must get into an agreement with the IRS. The IRS Fresh Start Program consists of 4 main programs that are accessible to taxpayers who owe much more than they can reasonably afford to pay. The four major programs are as follows: Currently Not Collectible (CNC) Offer In Compromise (OIC), Installment Agreement (IA), and Penalty Abatement (PA).

These relief programs from the IRS Fresh Start Program allow qualified taxpayers the option to reduce or even eliminate their tax debts. These tax experts will help you qualify for the program and help you figure out which options will give you the most suitable outcome. Especially if the agreed amount from the installment agreement that you’ve previously set up with the IRS is a bit harder to pay off these days. It is very important for taxpayers to remain tax compliant because it will save you interest and penalties on the current year and prevent you from a continuous circle of always owing tax.

Resolve Your Tax Bills

If you’ve found yourself in a nasty mess with the IRS, take a deep breath. For taxpayers who may have difficulty paying off an excessive amount of tax debt, there’s a new and improved relief program that consolidates many major relief programs into a one-size-fits-all assistance program. Any issues regarding back taxes, unfiled years, or any other tax-related problems may be solved through one program; the IRS Fresh Start Program!

How Simple Is Qualifying?

Considering that the Fresh Start Program is a federal program, you would think meeting the qualifications may be very difficult, but really, it’s a lot simpler and quicker than you think. Take the following steps in order to find out if you are eligible in as little as 3 minutes.

  1. Fill out some basic information about yourself and your back taxes here.
  2. Have a representative reach out to you to discuss your eligibility.
  3. Go through the enrollment process and finally reduce or eliminate your tax liabilities.