WHAT TO DO IF YOU OWE THE IRS MONEY
If you owe the IRS
less than $10,000 you can usually resolve your tax debt on your own.
However, if you owe the IRS over $10,000, you should work with a tax
professional who is experienced and qualified to handle this more
When you hire a tax professional, you need
to ensure that they are a CPA, Enrolled Agent, or tax attorney- as
those are the only professionals allowed to practice before the IRS.
CPAs and attorneys are limited to practicing in the states that they
are licensed, while Enrolled Agents can practice in any state.
Your hired tax professional will help to alleviate your debt through
1 of 4 means:
1. Installment agreement
agreement is a monthly payment plan for paying off your debt to the
2. Partial payment installment agreement
A fairly new
debt management program where you have a long term payment plan to
pay off the IRS at a reduced dollar amount.
3. Offer in
A program where you can settle your tax debts for less
than what you actually owe. This program requires making a lump sum
or short term payment plan to pay off the IRS at a reduced dollar
4. Not currently collectible
Where the IRS
voluntarily agrees not to collect on the tax debt for a year or so.
A tax professional can save you time and money by reducing and
eliminating your tax debt. However, be wary of companies that offer
"pennies on the dollar" through an offer in compromise. These
companies are more interested in selling you something that you do
not need, and you often end up owing the IRS and wasting money. So
if you owe the IRS money, you have options!