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Owe more than $250,000 to the IRS? You have more options.

On Behalf of | Aug 31, 2022 | Back Taxes or Tax Debt |

No one wants to find themselves in arrears with the government, let alone for a significant amount. Thankfully, those who find themselves owing a large sum to the Internal Revenue Service (IRS) may find that they have more options to pay their bill than those who owe less.

Why would taxpayers with a larger tax bill have more repayment options?

Those who owe $50,000 or less in tax obligations may be able to negotiate a more manageable repayment plan with the IRS. This plan is largely dictated by the agency. The agency has taken steps to ease the availability of repayment plans for those who owe less than $50,000, including increased ability to apply online.

Although a repayment plan may remain an option for those with a higher tax bill, other options are also available. Various factors will impact the discussion of options, including the dates of the tax bill. Whether the bill was the result of a single tax year or cumulative years will impact negotiations.

Is there anything else I should know before negotiating payment for a large tax bill?

It is also important to keep the big picture in mind. Consider whether you have other obligations that you need to pay down at the same time of if you will focus specifically on the tax debt. If you can pay off the debt in a relatively short period of time, like five years for example, you will have a lot of leeway to negotiate terms with the IRS that conform to your lifestyle — if you know how to negotiate with the IRS.

If the IRS takes charge of negotiations, they will likely offer a one-size-fits all type of solution. It is easier and more efficient for the agency but may not be the right fit for your specific situation. An attorney experienced in these types of negotiations can advocate for a tailored payback plan that matches your exact circumstances and help you avoid the IRS’ attempt to put you into a standardized repayment plan.