How to Pay Taxes You Owe

Last updated on July 27, 2021

If you owe taxes to the IRS and want to pay them off, you have choices. The first option is to pay the entire amount of taxes owed in a single payment. The IRS prefers this method and taxpayers do not encounter any difficulty in paying back taxes through this method.

Those taxpayers who cannot pay the entire tax debt amount in a single payment can choose to pay through IRS Installment Agreement. Under this payment program, taxpayers can pay taxes they owe in fixed monthly installments. The IRS charges interest on any amount in taxes that remains to be paid.

Taxpayers who want to pay their back taxes, but are restricted by their poor financial condition can opt for Offer in Compromise program or Currently Not Collectible. Under Offer in Compromise, the IRS reduces the total tax debt amount of taxpayers so that they may clear their back taxes. Under Currently Not Collectible, the IRS postpones collection of back taxes because the financial condition of taxpayers does not allow collection of any amount of back taxes.

It is important to note that taxpayers whose finances are sufficient only to meet basic living needs such as food, shelter, transportation etc. may qualify for Currently Not Collectible or Offer in Compromise. If the IRS thinks you can afford to pay back taxes (that includes property and assets), they will collect it.

Taxpayers can benefit from taking outside help in choosing a tax debt payment program. Every IRS program has qualifying guidelines that need to be met. Apart from that, tax relief companies negotiate the terms and conditions of a payment program to achieve the best possible resolution of a back taxes problem. If you owe taxes to the IRS, choose the best tax help for speedy and effective resolution.