What is tax delinquency? Delinquent taxes are taxes that you have not paid. When you miss the filing and/or payment deadline, your taxes are labeled as delinquent – hence Ignoring your unpaid taxes may result in serious ramifications. The IRS can garnish your wages or place a tax lien against your personal property and assets to collect past-due amounts.
What Are My Options When I Recieve a Delinquent Tax Notice?
If you don’t pay your taxes when they are due, the IRS will begin the collection process. A bill for the amount past due is sent first. The IRS will then send a delinquent tax notice following up with it. The total tax owing, including unpaid taxes, penalties, and any interest that has accrued since the initial bill, will be shown.
It is critical that you act on a delinquent tax notice as soon as feasible to avoid additional fines and interest. The following are the most frequent solutions for dealing with an overdue tax issue.
File and Pay Tax Debt
If you submit your tax return and pay your taxes within eight weeks of receiving the letter, there is no further action required.
Partial Payment Plan
In some circumstances, the IRS may accept a partial payment plan. This allows you to pay off less than the total amount owed throughout the collection duration.
Installment Agreement / Installment Plan
When you can’t pay your tax debt in full, an IRS installment plan might assist. It’s essentially a payment plan that is spread out over several months or years.
Offer in Compromise
You may file an Offer in Compromise to settle your tax debt for less than you owe if you qualify. Typically, you’ll pay the revised amount all at once, but the IRS is willing to make periodic payments as well.
Currently Not Collectible
The IRS may temporarily postpone the collection of your tax debt if you are unable to pay owing to extreme financial difficulty. You will be declared currently not collectible if you qualify for this status.
At My Tax Settlement, we work with our clients to discover the best option for resolving their tax delinquency. Now is the time to schedule a free consultation and start getting the IRS off your back!