Three ways to handle IRS tax debt: pay it all now if you can, set up a monthly installment plan for five years, or use an Offer in Compromise to settle for less. One client with $500,000 in debt settled for $100.
You owe the IRS money, now what? If you can pay the amount you owe the IRS within that year, then pay off the tax debt as much as you can, as fast as you can. If you're going to need more than the end of the year to pay off that amount, you may want to consider doing an installment plan. This is where the IRS lets you take the amount you owe, comes up with a monthly payment, usually spread out over 5 years, Or if you owe a lot of money, the IRS has what they call an offer in compromise. This is basically going to the IRS and saying, I owe you this much money, but based on my financial situation, I can only pay this much money. And you open your whole kimono to the IRS. We've been doing this for years as a firm. One of our best success stories is the client owed $500,000 in tax and we settled for $100 because that's what all they could afford based on their financial situation.
