If you are struggling to pay your taxes, the IRS offers short-term payment agreements that can help ease the financial burden. These agreements allow you to pay your tax debt over a period of 120 days or less. This option is ideal for taxpayers who are experiencing a short-term financial difficulty and need a temporary payment solution.
How to Apply for a Short-Term Payment Agreement
Applying for a short-term payment agreement is a straightforward process. You can apply by calling the IRS at 1-800-829-1040 or applying online through the IRS website. Before you apply, it is essential to calculate the amount you owe in taxes and the amount you can realistically pay in a short period.
If you owe more than $10,000 in unpaid taxes, you will need to provide financial statements to support your request for a short-term payment agreement. The IRS will review your financial statements and determine if your request is reasonable.
Benefits of a Short-Term Payment Agreement
One of the significant advantages of a short-term payment agreement is that it gives you more time to pay your taxes. It can also help you avoid additional penalties and interest that you would incur by not paying your taxes on time.
Another benefit is that you can have peace of mind knowing that you are not ignoring your tax debt. You are taking proactive steps to address your financial situation, which can alleviate stress and anxiety.
Things to Keep in Mind
It is important to keep in mind that a short-term payment agreement is not a permanent solution. You still have to pay your taxes, and any unpaid taxes will continue to accrue interest and penalties until they are paid in full.
Additionally, if you default on your payment agreement, the penalties and interest will resume and could result in collection action by the IRS.
Overall, a short-term payment agreement is an excellent option for taxpayers experiencing financial difficulties. It can provide temporary relief and help you avoid additional penalties and interest. If you are struggling to pay your taxes, reach out to the IRS to discuss your options.