Tax Debt Options
If you are in the unhappy situation of simply not having the money to pay back federal income taxes that you owe, you have three courses of action:
- You can get an installment agreement, in which you will pay the full tax liability, but over an agreed-upon period of time.
- You can file for an offer in compromise, in which you pay less than the full amount you owe, based on a negotiated agreement with the IRS.
- Your choice will depend on your financial situation, how much you owe, and how much time remains on the statute of limitations for your tax liability. Generally, the IRS has 10 years from the date of the assessment to collect the tax.