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Can't Pay Your Taxes? - Taxpayer Help and Education (IRS Tax Topic 202)

For various reasons, you may not be able to pay your federal individual income tax in full. Do not delay filing your tax return because you are unable to pay in full. If your tax return is not filed on time, you may have to pay a "failure-to-file" penalty, in addition to a "failure-to-pay" penalty, and interest.

If you can't pay in full, file your tax return on time and attach either a completed Form 9465, Installment Agreement Request, or your own written request for a payment plan, to the front of your return. (Specify the amount you can pay and the day you wish to make your payment each month.) You should pay as much as you can with the return, (to lower the interest and penalty charges). If you have already filed your return and have received a notice, or bill, requesting payment, you may attach a completed Form 9465 or your own request to the notice and mail it in the envelope provided. The IRS will let you know, usually within 30 days, whether your request is approved, denied, or if additional information is needed. If approved, a one-time user fee of $43 will be charged.

Before requesting an installment agreement, you should consider other less costly alternatives, such as a bank loan. The interest rate a bank charges may be lower than the combination of interest and penalties imposed by the Internal Revenue Code. Remember, penalties and interest will be added to the balance due even if an installment agreement is approved.

It is important not to ignore an IRS notice. If you neglect or refuse to make payment or other arrangements to satisfy your obligation in full, we may take enforced collection action (filing a notice of federal tax lien, serving a notice of levy or offset of a tax refund).

Select Topic 201 for information about "the collection process." For additional information regarding alternative methods of payment, or the nearest location to receive assistance, please check How to Contact Us or call 1-800-829-1040.

If you would like more information on "your rights as a taxpayer," how to make arrangements to pay your bill, enter into an installment agreement, and to inquire about the implications when you take no action to pay, download Publication 594, Understanding the Collection Process, and Publication 1, Your Rights As a Taxpayer, or you may request copies by calling 1-800-829-3676.

The above limited information is intended for informational purposes only.  If legal advice or other expert assistance is required, the services of a competent professional should be sought, and this general information should not be relied upon without such professional assistance. 

NOTE: If you are unable to pay your taxes, you should consult with a professional who handles IRS collection matters. You should discuss your situation to find out an appropriate long term course of action. In some instances, simply entering into an installment agreement with the IRS may be the best solution. However, any plan of action must be realistic. For example, if the installment payments are too large so as cause you to fail to pay enough in current period taxes, then you are setting yourself up for defaulting the installment payment agreement. That could result in levy and seizure in the future. Depending on your specific facts and circumstances (including: financial condition, health, future earning potential, ability to borrow, equity etc...) you may wish to consider an Offer in Compromise,  designated payments, bankruptcy, or other options.  Please give me a call.  There is no charge for an initial consultation. I look forward to hearing from you.


For assistance, please contact A. Nathan Zeliff, Attorney at Law







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