The IRS Offers Options for Getting Right with Uncle Sam

A good CPA can help you find
solutions to your tax problems.

Do you owe the IRS right now? The first thing to do is open all mail from the agency so you're on top of the matter. Next, stay calm. Well, it's understandable if you panic a little, because the IRS wields power that can make your life miserable. Depending on your situation, the agency can take your paycheck and your bank and retirement accounts, and more. They'll seize land, business assets, cars — anything they can auction and turn into cash quickly.

But all is not lost if you act now.  

Consider the following strategies to get back in good graces with Uncle Sam:

1. Ask for more time. Depending on your circumstances, you may be granted a short extension period to pay your tax in full. You can request this by filling out an application for an online payment agreement or by calling 800-829-1040.

2. Try for an installment plan. If you owe $50,000 or less in combined taxes, penalties and interest, you can fill out the application for an online payment agreement. Fees for setting up payment plans can range from $43 to $105.

3. Make an offer. That is, file for what's known formally as an "offer in compromise." You basically tell the IRS that you're prepared to pay a certain amount to settle your debt. Getting agreement will depend on whether the agency believes that this is the maximum you can manage. You must meet certain standards to be considered. If you're going through a bankruptcy, for example, you're not eligible. And if you haven't filed all of your tax returns, don't apply.

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