So you’ve just filed your tax return and found out that you owe money to the IRS. A disappointing and discouraging feeling for anybody, but more so if you cannot afford to pay. First things first, do not panic. You are not alone. The IRS has prepared ways to help in this situation and the experienced tax attorney’s at Michigan Pure Tax can assist!
Although you cannot fully pay your tax debt, it is important that you still file your return in order to avoid late-fee penalties. Next, you should figure out how much you can actually afford to pay—even if it is only a small fraction of the debt because you will reduce the late payment penalties and interest. Of course, there are ways to make extra money to pay off this debt. You can sell assets, borrow money through family, friends, or loans, or pay it off with a credit card (we do not recommend this if you will find it difficult to pay the credit card debt).
If any of these methods do not seem feasible or still do not generate enough money, fortunately, the IRS has options for you and the tax resolution specialists at Michigan Pure Tax can help.
- Get a Short-Term Extension: This is a great option if you believe you can pay your taxes in 120 days or less. You must apply for the extension plan through the IRS website. Our tax attorneys have great knowledge in this area and can help if needed.
- Offer in Compromise: An offer in compromise is highly sought after as it allows you to settle your full debt for significantly less than you owe. Though despite what you may have heard, an OIC is rarely granted as the IRS simply will not accept if they believe you have the income and assets to repay your debt. Fortunately, the Fresh Start initiative has recently broadened the qualifying guidelines so some taxpayers who weren’t able to obtain an offer in compromise may now qualify. Our tax attorneys will be able to review your tax case and successfully determine if an OIC is appropriate for you.
- Monthly Payment Plan: Installment plans allow you to pay off your debt in small increments over time.
To find out what option is best for you, feel free to call the Michigan Pure Tax team any time at (248) 329-1160. We are available 24/7 to assist.