1.5 IRS Procedures: Collection Procedural Questions
I am unable to pay my delinquent taxes. Will the IRS accept an Offer
in Compromise?
You may qualify for an Offer in Compromise if you are unable to pay your
taxes in full or if you are facing severe or unusual economic hardship. Refer
to Tax Topic 204, Offers in Compromise, for additional information.
References:
Can I ask to make installment payments on the amount I owe?
Yes. If you cannot pay the full amount due as shown on your return, you
can ask to make monthly installment payments. However, you will be charged
a one time user fee of $43.00, and you can be charged a late payment penalty
unless you can show reasonable cause for not paying the tax by April 15, even
if your request to pay in installments is granted. Before requesting an installment
agreement, you should consider less costly alternatives such as a bank loan.
To request an installment agreement, send Form 9465 (PDF), Installment Agreement Request with your return or call
(800) 829-1040. You should receive a response within 30 days. For more details
on installment payments, refer to Tax Topic 202, What to do if You
Can't Pay Your Tax, or Publication 594 (PDF), Understanding
the Collection Process.
References:
I received an IRS bill for an amended return I filed. I am not able
to pay the whole amount at this time. Will the IRS allow me to make monthly
payments?
If you cannot pay the full amount due, you can ask to make monthly installment
payments. You can be charged a fee for this arrangement. Penalties and interest
will continue to accrue on the unpaid amount until the account balance is
paid in full. Refer to Tax Topic 202, What to Do if You Can't Pay
Your Tax, for more information.
References:
1.12 IRS Procedures: Refund Inquiries
Can a person receive a tax refund if they are currently in a payment
plan for prior year's federal taxes?
As a condition of your agreement, any refund due you in a future year will
be applied against the amount you owe. Therefore, you may not get all of your
refund if you owe certain past-due amounts, such as federal tax, state tax,
a student loan, or child support. The IRS will automatically apply the refund
to the taxes owed. If the refund does not take care of the tax debt; you must
continue the installment agreement.
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