Nobody likes owing the IRS a large debt. Don’t stress yourself too bad, you have some options to help ease the burden of that large tax bill. There are two specific options I will outline for you. These include the OIC Program and Installment Agreements.
The Offer in Compromise (OIC) program allows a settlement of the tax liability for less than the full amount owed. The amount offered has to be equal to or greater than the value that is realized from the taxpayer’s assets. There are three ways the IRS will accept the OIC Program:
• There is doubt that the amount owed is fully collectible. The taxpayer’s income and assets are less that the tax liability owed.
• There is doubt in regards to the existence or amount of tax debt under law related to the liability.
• The tax amount owed would create an economic hardship or would be unequitable.
The Installment Agreements allows a taxpayer to make a series of monthly payments overtime if the full amount owed can’t be paid in 120 days. To set up the installments you must file form 9465. You have a few options on how to make the monthly payments. Some of these include:
• Payroll deductions
• Debit to your bank account each month
• Online/phone payments
So, when you see that large tax bill during tax season don’t be so alarmed. You have plenty of ways to get it paid back without putting your bank account in the negative.