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Paying Overdue Taxes (Visit this link)

Options for paying taxes and penalties owed to the IRS include:

Full Payment.

Pay the full amount, including tax, interest, and penalty.

Installment Program.

You can request to pay what you owe in monthly installments, i.e., if you owe $1,200, you could offer to pay $100 a month. With an IRS payment plan, penalties and interest usually continue to accrue until the balance is paid. Many people can apply online depending on how much they owe and whether required returns are filed.

For more information on Installment Program: www.irs.gov/payments/payment-plans-installment-agreements

Currently Not Collectible (CNC) Status.

If you can’t pay without hardship, the IRS may place your account in Currently Not Collectible (CNC) status. This can pause active collection. This means that the IRS will stop trying to collect from you, but it does not cancel the debt, and interest compounds daily on unpaid taxes. Penalties may also apply (often calculated monthly).

For Penalty relief: www.irs.gov/payments/penalty-relief

Offer In Compromise.

If you are confident that you will never be able to pay the full amount that you owe, you can make an offer to cancel the amount you owe. For example, if you owe $10,000 to the IRS, you might offer to pay $2,000 to settle. This will be accepted only under extreme circumstances, in which the IRS has ruled out the possibility of an Installment Program or Uncollectible Status. If you are considering this option, seek professional help.

It can be intimidating to approach the IRS. As scary as it may seem, repaying your overdue taxes will benefit you. Your reported income and how much you have paid in taxes over the years will affect the amount of your Social Security and Medicare benefits. Keeping your income properly reported (especially self-employment income) matters for future Social Security benefits. If you’re unsure, get tax help. Filing your taxes also affects your eligibility for educational grants, credit, and loans. Remember, you don't have to work with the IRS on your own. Seek help from an accountant and ask friends and your case manager for support.

For more information for Offer-in-Compromise go to: IRS Offer in Compromise hub:
www.irs.gov/payments/offer-in-compromise

IRS Form 656-B (OIC booklet PDF):
www.irs.gov/pub/irs-pdf/f656b.pdf


For more information on taxes, forms and publications and how to contact your local office go to:
www.irs.gov