If you discovered that you have a tax debt, you can obtain a formal resolution using an IRS payment plan.
Innocent Spouse
Relief
If you filed jointly and you found that you owe back taxes
because of information reported by your spouse, then you can claim full relief
from the payment of the tax debt if:
·
You had no knowledge of the understatement of
income that led to the tax debt, and
·
You had no reason to know about the
understatement of income.
If both these criteria are met, then the responsibility of
paying the entire tax debt may be shifted to the liable spouse. This resolution
program is known as Innocent Spouse relief.
Installment
Agreements
The IRS allows repayment of tax debts through Installment Agreement (IA) plans. Depending
upon the amount of tax debt owed, the IRS has various kinds of installment
agreements. You can choose the appropriate plan to pay your full tax debt in
fixed monthly installments.
Offer in Compromise
If you cannot afford to pay your entire tax debt, you can
apply for an Offer in Compromise. Before
applying, ensure that you do not have property, income or assets that can be
put toward your debt. Only taxpayers that can meet only basic, allowable living
expenses will be approved for a tax debt reduction.
Currently Not
Collectible
If you cannot pay any amount of your tax debt, you can stop all
IRS collection actions by obtaining the status of Currently Not Collectible. Regardless of this status, penalties and
interest continue to accrue on the tax debt until the ten-year statute of
limitations expires.