How to Negotiate Your Own Payment Agreement With the IRS

Tax On Money Background
I’ve heard two stories in just as many days about people who paid one of those TV tax companies thousands of dollars to help them with their IRS debt and when all was said and done, all they got was a monthly installment agreement with the IRS.  I’ve got a big problem with that–because in both of those cases, the people could have used that money to pay down their debt–and done the installment agreement themselves for free.
While not everyone can handle their IRS tax debt problem themselves, before you go sending thousands of dollars to some company with a 1-800 phone number, lets see if you can handle this yourself for free first.
The first question:  Do you really owe the money in the first place?  That’s pretty important.  If your taxes were professionally prepared and you have a huge balance due-well you probably really do owe the IRS.  On the other hand, if you haven’t filed for several years and the IRS says you owe them lots of money–there’s a good chance you don’t.  Anybody does taxes better than the IRS–anybody!  The CPA down the hall, H&R Block, VITA, the really bad tax place I won’t name down the street, and even my high school intern — they all do taxes better than the IRS.
True story:  a couple of years ago, I had a high school intern while I was working at the big tax company.  She had only been there for a couple of days, she was supposed to help with the phones, photo copies and data entry type stuff.  A woman came to me with an IRS tax debt of $16,000.  I took the case, but I was busy working on another return so I asked the intern to just do the basic data entry work for me.  A little while later she came to me and said, “I did the data entry but I’m afraid you’re going to have to show me what I’m doing wrong.”  “What do you mean,” I asked, “It’s just data entry.”  “I know,” she said, “But I heard you say she owes the IRS $16,000 and on all the returns I input she’s got refunds!”
I looked over everything the girl had done.  It was perfect.  Instead of the woman owing the IRS $16,000, the IRS owed her $8,000.  So when I tell you that anybody prepares a tax return better than the IRS–I’m not kidding.  Now you can go to an IRS office and they will help you with a return–those people know what they’re doing (usually), but those computer generated IRS returns that get mailed to you are garbage.  Plain and simple.
Second question:  Do you owe less than $50,000?  If you owe more than $50,000, you won’t be able to do an IRS streamline installment agreement.  If you can pay enough on the debt to bring it to $50,000 or less, then you can still do the streamline–otherwise you are going to want to get some help with your debt.  But let’s say you owe $52,000.  Well, you could pay some tax company $8,000 to negotiate for you, but if you paid $2,000 towards the debt, you could negotiate for yourself and still have $6,000 more pay your debt or buy groceries or whatever.
Third question:  How much can you afford to pay each month?  Let’s say you got hit with an IRS bill of $6,000 and you just didn’t have any money saved to pay it.  Realistically, look at your financial situation and figure out what you can afford.  What’s the most you could possibly pay without causing yourself a hardship?  That’s going to be your upper limit number.  You need to think it through because you don’t want to commit to paying $500 a month if it means you lose your house.
Here’s the mechanics of it:  In a perfect world–you should be able to pay of your IRS debt within 2 years (24 months.)   So if you take that $6000 and divide it by 24, then your monthly payment would be $250.  And if you can afford that–great!  That’s the preferred timeline for the IRS to have you pay off your debt.
But if you can’t handle the $250 a month, you need to know that the IRS will go as far as 72 months (or six years) for you to pay off the debt.  So if you take $6,000 and divide that by 72 then you get $85 dollars a month (I rounded up to the nearest 5.)
What you might want to do is negotiate the $85 payment, but then pay the $250 to get rid of the debt faster.  That way you’ve got some wiggle room if you lose your job or have some other issue.
Here’s the other stuff you’ve got to know:
There is a fee of $105 for setting up the installment agreement.  It’s lower if you set up direct debit from your checking account or it may be reduced if your income is low–make sure you ask about it, they won’t always tell you.
If you’re trying to negotiate a payment agreement and things are just not going your way, it’s okay to back out before you commit.  Tell them that you think you’re going to need professional help and that you will have to call them back later.
Once you do have an agreement, you have to hold up your end of it.  Make your payments on time.  If you’re late, your installment agreement is void and you’ll have to start all over again–including the $105 fee for setting up the agreement.  (Not to mention those nasty letters they send about putting a lien on your home and levying your bank account.)
One final word, if you can’t handle the installment agreement yourself–maybe your tax issue is too complex or you’re just too intimidated to deal with the IRS, get help from a local professional.  You’ll need an enrolled agent or CPA because they’re licensed to represent you before the IRS.  I recommend using someone local (okay, someone like me) that you can meet with in person.  Sometimes, IRS debt issues will cost a few thousand dollars to settle up, depending upon the work that needs to be done.  But it’s important to know what is going to be done before you pay that kind of money out.  $8,000 for something you can do yourself is too high a price.  Ask questions, know why they’re charging you that much, and what you’re getting for it.  You have a right to know.

30 thoughts on “How to Negotiate Your Own Payment Agreement With the IRS

  1. I have been on full social security disability since 2004. However i have recently started the process of returning to work through the social security ticket to work program. my disability check was already being garnished for $200 a month for old student loans cutting my monthly check from $1,350.00 a month to $1,150 per month. Then just as i started getting the wheels of the ticket to work program rolling the IRS starting garnishing my check for another $200 a month reducing my montly check to $950.00 a month. The IRS garnishment is for taxes owed from the early and mid 90’s. As many have found out when you have not worked in a long time it cost money to return to work, in my case the biggest expense being getting my commercial drivers license again. As of right now the garnishments are making it very difficult to come up with the up front money it cost to return to work.
    Is it possible for me to get free or low cost legal help with this through the Pro Bono act or another simular service. I do want to return to work full time, but having a hard time getting there from here. Any advice will be greatly appreciated…Thank-You

  2. Hi Jimmy,
    Congratulations on getting on the Ticket to Work program. This is what I think you should do. Go directly to one of those IRS walk in centers. Here’s a link to find one nearest you. http://www.irs.gov/uac/Contact-Your-Local-IRS-Office-1

    You’ll want to go see them in person, bring a copy of your social security disability check, bring your bank statement, and some copies of your bills. Let’s face it, at $950 a month–you’re not out there partying it up.

    You might be able to get on the “currenly uncollectible” program. It will get the IRS off your back for awhile until you’re actually making some money. Now if you can afford to pay them something–maybe $50 a month, that would be easier on you than the $200. It looks to me like you could make a pretty good case for yourself.

    Here’s another thing–the debt you owe, is it really money you owe or did the IRS file returns for you because you never filed? If the IRS did your returns, you might not owe as much as they say you do. Always make sure you check that out.

    There are lots of good people who work at the IRS and hopefully you’ll get one of them. If you are not getting the assistance you need, it’s okay to say, “Excuse me, I think I’ll need to get some professional assistance.”

    But really you do have a special situation and it’s worth asking for some assistance. Good luck.

  3. Help, I am intimidated by the IRS. I don’t know if I can or should negotiate with the IRS or if I should get an attorney….
    You see in 2008 my tax consultant suggested that my husband and I qualifed for the New Home Buyers” tax credit”. Unfortuanately I didn’t ask the right questions. I didn’t realize it was not a “credit” at all it was a LOAN. That year we owed the IRS approx. $4000. So part of the “tax credit” went to pay the tax we owed the other part helped us with our debt.
    Now I find out that I was not entitled to this “tax credit” and the IRS says I now owe them 11,100.00 which is the amount they gave, the about we gave to them and late payment, interest etc.
    What do I do?
    If I could just pay them back the $7500 minus the $500 I have paid back to them (last year $250 and the year before $250) I would get the money and pay it in full.
    Is that even possible or will the IRS NOT work with me on this issue?
    I would so appreciate any advice you can give….
    Kim

  4. Hi Kimberly,
    First things first–you’re intimidated by the IRS. So don’t deal with them yourself. You’re a good person–okay so there was a mistake in your taxes. Don’t be intimidated. Easier said than done. If you are intimidated–don’t go it alone.

    That said, an attorney can be really expensive. But also, you don’t want to use one of those fly by night “pennies on the dollar” firms either. You just need an EA or CPA. Here’s a link to find an EA in your area: https://portal.naeacentral.org/webportal/buyersguide/professionalsearch.aspx

    You’re not looking for a whole debt deal (which can run anywhere from $2000 to $8000 dollars.) You just want someone to be with you to help you make the phone call. So maybe two hours worth of time–$200 – $300. I just want to get you into the right frame of mind price wise.

    Now–you might even want to try this on your own with a gutsy friend or relative. Use a speaker phone and have your moral support with you. It’s worth a try. If you’re not gettin what you want, back off and say, “I’m sorry. I’m going to have my representative contact you.” This buys you time to get professional help if you need it.

    Now, the first thing I would do is make sure you really don’t qualify for the first time homebuyer credit. That’s job one. Really. You wouldn’t have applied for the credit if you hadn’t bought a home. First time home? Were you just missing some documents? Just checking.

    Okay, so lets say you really owe the money. Have you ever had a tax problem before? If not, you should request an abatement of penalties. It might not fly, but worth asking for.

    From there, it’s all down to negotiating the installment agreement. You’re probably looking at a minimum payment of around $160 a month. Is that even possible for you? If yes, you’ll be okay. If no, you’ll have to prove you don’t have enough income.

    If you need help, get help. If you can go it alone, good for you. Do what works for you. Good luck.

  5. I received an IRS bill in the mail stating I owe $6018 from a mistake on my 2011 taxes where I received a payout from my retirement fund. I don’t have the money to pay this off at all, and would like some advice on how to best handle the situation. Any advice would be great

  6. Hi Dustin,
    So you received an IRS notice saying that you owe $6018. I’m guessing that the bill is probably right, but just to be on the safe side, I recommend having someone take a look at it. Even if it’s just going to the local H&R Block office for one of those second looks. Although IRS notices about owing for a retirment payment are often right–the IRS makes so many mistakes I hate to have you pay more than you owe.
    But let’s assume that’s the right number anyway. For $6018–the IRS would expect you to be able to pay that off within 72 months under their “streamlined payment agreement”. $6018 divided by 72 is $83.58. The IRS would expect you to pay at least $85 a month. Is that something you can handle? If yes, then go ahead and set up your agreement.
    If cash is tight and you really can’t muster up $85 a month, then you’ll want to get some help. You’ll need to fill out a form 433 and show the IRS bank statements and copies of bills and things like that.
    I highly recommend coughing up the $85 a month if you can do it.
    That said, paying more will pay off that debt faster, and the soone you unload it, the better off you are.

  7. Hi, Is it true that some times you can get a “one time” deal where they wipe your debt clean from IRS if you never work or file again after that..I hope that made sense…My Husband was working and paying on an old debt of like $4,500 to the IRS then he was injured and disabled at work and has since filed for SSI and its been almost 7 years now and the debt has gone up to like $6000 with fees cause he hasn’t paid since his injury and we are trying to figure out a way to clean this off hi record for good because he is no longer able to work and/or have a tax return..can you file bankruptcy on taxes?..uhg i’m just lost!..please help.

  8. Hi Dana,
    Being lost when talking about the IRS is pretty normal.
    There is something called an offer in compromise–that’s the “pennies on the dollar” deal where you negotiate a payment of the outstanding tax bill. Usually, you don’t file an offer like that because companies that prepare the paperwork for you charge so much, you may as well just pay the IRS bill.
    That said, that might be something to consider, just don’t hire one of those $8,000 firms. Here’s a link to see if an offer is something to even think about. http://irs.treasury.gov/oic_pre_qualifier/
    I think people would save thousands of dollars using this tool before calling a tax company. It’s not perfect, but it’s a pretty good indicator of if you have a chance or not.

    Another thing that you might want to do is just wait it out. After 10 years, the debt drops off. There’s no way for your husband to pay the debt, so that might be the best option. You can call the IRS and they will give you the date the the debt becomes uncollectible.

    I’ve noticed that although the IRS will drop old debts, some states (like Missouri) won’t. So if you have any state debt, that may still hang over your head.

    You can file bankruptcy, but once again, the cost might be more than the debt. And, if you don’t complete the bankruptcy, the whole debt get’s added back and the amount of time you were in bankruptcy get’s added on to that 10 year term–so just be aware of that.

    I hope that helps a little anyway.

  9. hi,
    I have to pay irs 20,000.00,for back tax,is there any thing I can do to bring that down,its from 2001 to 2007..long story

  10. Hi Brijesh,
    So if you owe $20,000 from 2001 to 2007–I’m guessing that about half of that is penalties and interest. Ouch.

    Here are a few thoughts, I don’t know if any of them will help your case.

    1. Have you actually filed the returns yet? Often, people get IRS letters saying they owe money–and since you say it’s 2001 to 2007–that kind of sounds like you haven’t filed. Usually, I can reduce the amount owed by quite a bit just by filing the returns. One time, I helped a woman who was told she owed $15,000, but after I did the returns she had an $8,000 refund. You won’t qualify for any refunds (tax years are too old, any refund opportunity you had was missed) but at least you might reduce the debt.

    2. Maybe you’ve already filed and you really owe the full $20,000–you might want to see if you qualify for an offer in compromise. The IRS website has a “pre-qualifier” to help you determine if an offer in compromise is a possibility for you. Here’s the link to check that out: http://irs.treasury.gov/oic_pre_qualifier/

    3. If neither of those options are availalbe, it’s pretty hard to get any type of reduction. You may be able to abate some penalties–but given that you’ve got 7 years of taxes there, you’re unlikely to qualify for an abatement of any kind. Sorry.

    Good luck.

  11. I have a bill that was due ( now past due) the amount is 659.00. I don’t know how I owe this. I have never had to pay tax to the IRS. I have always received a refund. the letter I got stated that the amount I reported in 2012 was not correct. The amount was not correct I found after getting my w2 from last year in the mail today. I don’t understand how I could owe them… there is a brake down on the papers they sent me but the numbers just are not adding up. even with the new numbers It seems to me like I should be getting more money back… do I need to call some one?

  12. Hi Sean,
    I don’t have enough information about your case to give you any kind of an answer. If you think you don’t owe, you need to talk to someone.

    If the numbers don’t add up, you need to meet with someone who can make them work–and if they don’t work–help you get things fixed.

    But do contact the IRS. Let them know you’re working on it. Have them explain the numbers to you if nothing else. Don’t delay. You don’t want them to go and levy your bank account.

  13. hello, i currently owe $6200 in taxes and i think ill owe a litte this year. im getting married in Sept and my fiance will owe child support for about 17000. How do we keep our taxes seperate? i know i wont see a return for a long while but how do i do it seperate and also a payment agreement ive been paying $50 a month and that s all i can afford. i had to fill out a formrecently askign expenses and income ect…is it likely they will accept? I plan on upping my wihtholding next year so my return will resolve the amount quicker. any suggestions?

  14. I am not currently working, 58 years old and paying for my adult daughters mental health treatment the last two years which has dwindle down my retirement dollars to nearly nothing. Now I owe the IRS for all those withdraws bout $8500.00 just in 2013, is there any type of exemption or hardship negotiation that I could take advantage of to help me. My only form of payment would be to dig back into retirement to pay these fees and accumulate even more fees. On top of that my money is in a fixed annuity which takes fees right off the top. Obviously I never envisioned these circumstances but it has and I don’t know if someone can offer advice or service or the best place to turn.

  15. Hi Ruben,
    I have some ideas, but I don’t know if they can help you or not. I’ll tell you what I’ve got, it’s just that I’ve talked to other people with similar problems and there’s always some glitch that makes things not work. But here goes.

    Idea 1: You still have to pay tax on the $8500–but you might be able to reduce the penalty IF (and this is a big if) if the amount of money you pay for medical expenses is more than 10% of your AGI. Now, you probably can’t claim your adult daughter on your tax return as a dependent. (I’m guessing that she has a job and makes too much money–even if it’s only a little bit.) But, if the only thing that keeps you from claiming her as a dependent is that she makes too much money–then you can claim her medical expenses as a deduction.

    Now–even if you don’t itemize–if those medical expenses are over 10% of your AGI–then you can still use that amount to reduce the penalty that you’re getting hit with.

    Remember–Don’t just use your daughter’s medical expense, add in your expenses as well. Plus your wife’s and any other dependents (if you have a wife and dependents.)

    So that might help a little.

    Option 2: Maybe–once again, if you had retirement money in a 401(k) instead of an IRA, since you’re over 55–if you were no longer working for that company you could set up something where you can take equal distributions for 5 years. You’d want to talk to your financial advisor about that, but it’s an option for people with retirement money still in a 401(k) that they haven’t rolled over. (I just don’t think that works for you.)

    Option 3: this is sort of lame but–at least you can hold off the IRS for a while with a payment arrangement. I’m guessing that you probably owe the IRS close to $3000 all told on those taxes. You can set up an installment agreement with them to pay it off slowly. $3000 divided by 72 = $42. They’ll want at least $50 a month. You can do that until after you’re 59 and a half–that way you can take the money out to pay your IRS debt when you won’t get hit with the extra 10% penalty.

    I wish I had something better to offer you, but that’s about it. I’m sorry.

  16. Hi Nikole,
    I think the best way to keep your taxes separated from your husband will be to use the married filing separate tax status. Since you both have debt that will be taken by the IRS, that keeps your tax refund money going to the right account.
    If you owe the IRS $6200, the $50 a month is less than what they will do in a “streamlined agreement.” That’s why they’re asking you for the financial information.
    If you bumped it up to $87, then I think they’d go for it. But, if you still owe more than that, then no.
    Make sure you get them to include whatever you owe this year in the agreement otherwise your agreement will be void once the tax records show you have another balance due.

  17. Hi, I was divorced in 2006 and my ex husband owed taxes for years 99- our divorce. In our divorce decree states that I was not to be responsible for the tax debt he acquired. Unfortunately he files 2001’s taxes in 2011 and the irs is after me… Why and what can I do? I am a stay at home mother with no income and remarried in 2009!

  18. I am wondering about my own tax situation. I owe around $20000 with penalties for not filing taxes between 2010 and 2013.

    My job at the time was not withholding any taxes, federal or state and my W2 at the end of the year showed 0. When I asked a friend they simply said if it’s 0 that meant I was exempt and didn’t owe anything, so I didn’t file. I happened to go with my mom to file her taxes one year at an H&R Block and just casually asked the lady how do I go about being not exempt so I can get a refund, and she explained the whole mix-up and helped me file all of my returns at a really great discount.

    Now I owe this large amount and the tax bills are coming in, and there’s no way I could ever pay this… I’ve used the OIC Prequalifier and it has given me a payment of $200 over the course of 5 months… That just seems “too good to be true”

    I’m wondering if I file the appropriate paperwork, the 2 different forms required what are the chances of being approved for this and what are the terms and conditions? I know I have to pay on time and file on time for the next 5 years… but are there any hidden terms that I might miss and end up getting messed up with again?

    I have spoken with the tax company at my job and not only do they take out appropriate taxes now, they take out an additional dollar amount as well, as the lady at H&R Block advised me to do this as an effort to show good faith on my part.

    Any advice you have would be awesome. I’m 27 and don’t want this hanging over my head forever. I barely make enough with my 2 jobs to pay my bills now; if they were to garnish my checks I’d be homeless.

  19. Hi Heather,
    Oh dear, hindsight is 20/20. What I would have done at the time of your divorce is file my own tax returns for any open years a married filing separately. How could you have know though?

    Okay, so since he just filed for 2001 guess what? If he filed as married filing jointly it would have needed your signature on that return! I’m guessing you never signed it did you? Go ahead and file a 2001 return for yourself as married filing separately.

    We’re talking about 2001, it’s going to take a long time to sort this out, but that’s what I think is your best shot.

    If that fails–then I would file an innocent spouse claim. And–I think the fact that he must have forged your signature on the return is a good case for an innocent spouse claim.

    I’m not inclined to try a payment agreement because the IRS will use your current husband’s income in trying to get you to pay. I don’t like that (and I’m guessing current husband likes it even less than I do.)

    But start with filing your own 2001 return first.

  20. Hi Helena,
    I’d give it a shot. The worst that can happen is that the IRS says no. But you’ve got a good indicator that you’re going to get a yes. Maybe you won’t get that great of a deal but it sounds like your income is low and that’s really a good reason for qualifying for an offer.
    You’re now withholding properly so that’s good too. One thing–you might not want to withhold too much as the IRS will wind up keeping your refund so in your case, you’re better off owing a little. Not too much–your H&R Block lady is right, you want to show good faith, you just don’t want a big refund.

  21. I just got a bill for tax year2005 for back taxes in the amount of$11, 821.53. I did file jointly with my husband that year. But we divorced about a year later. I have filed separately since then and have paid all my taxes. The IRS has never contacted me. Now all the sudden I hear from IRS. A My ex husband, who I contacted said they were coming after me because he isn’t making his bankruptcy payments. So I am guessing he put the IRS debt into that ? I don’t know what to do. I did not agree or sign anything to the fact of this matter. Any suggestions. I’ve tried calling the IRS for several days. They say they have a high volume of calls right now and to call back another time.

  22. I couldn’t prove my dependants after being asked to so. I did not respond to the request in fear of them going back 4 years. My thoughts were that hopefully they’d just make me pay for the current year..They have now responded. My tax person and I discussed that in stead of my receiving the expected $4500 refund I’d probably owe about $3500. BUT they came back with me owing $8500(Yikes!!) Needless to say I’m was not prepared for that…I’m not sure how to handel this because as I stated I don’t want to rock the boat and have them swim back looking at the past 4 years…What are your thoughts

  23. Hi Lena,
    I’m an enrolled agent licensed by the Department of the Treasury to represent taxpayers before the IRS. I am supposed to say, “If you have incorrectly filed tax returns, then you should go back and amend those returns and pay the proper tax to the IRS.”

    Seriously, if you really did file incorrectly you should probably amend and get it over with.

    But, maybe you didn’t file incorrectly, maybe you filed the right way those other years, you just would have a difficult time proving it. You don’t want to pay tax you don’t actually owe.

    So, your preparer says that you would probably owe around $3500 but instead you got a bill for $8500.That sounds to me like you received the refund of $4500 already, that would make sense. 3500 + 4500 = 8000 plus some late payment penalty.

    But if you haven’t received that 4500 refund and they’re saying you owe 8500–then my reaction is, “What’s up with that?” And not seeing the paperwork I’m only guessing here, but I’m thinking you got hit with a gross accuracy penalty and a civil fraud penalty.

    So, if 2014 is the only year that’s wrong, I would be having your preparer request an abatement–you didn’t know you couldn’t claim them, etc. It was the first time there was ever a problem.

    If you’ve been claiming kids that you have no right to claim, you might want to amend now and get it out there, to prevent the nasty penalties.

    If your preparer is not an EA or CPA, you might want to talk to someone who is. You can find someone at the NAEA website. https://member.naea.org/naeassa/rflssareferral.query_page?p_vendor_ty=EA

    You can type in your zip code to find somebody.

    Here’s my “shoot from the hip, gut reaction” – the IRS probably went after you because somebody else claimed your kids on their 2014 tax return. It’s probably never happened before. If an auditor finds money one year, they’re more likely to go after more years. But claiming kids is a different story, unless somebody else is claiming them, there’s usually not additional audit years.

    But here’s the big exception— if you are not related to the kids you claimed–not a biological parent, or aunt, or grandparent — then except to hear more from the IRS as you would have no rights to EIC.

    And my other piece of advice is–if the IRS contacts you again, please respond. Even if you can’t prove your claim, respond to the notice. Show good faith. It helps.

    Good luck.

  24. Hi Susie,
    Here’s where the IRS is coming from. You were married to the man back in 2005 and you filed those returns together so as far as the IRS is concerned, you owe them the money.

    Now, I’m guessing that in your divorce decree, he agreed to pay the tax, right? He must have set up some sort of payment arrangement with them and since they were getting paid, the IRS wasn’t bothering you.

    But now, he’s quit making those payments and the IRS is saying — “Oh, let’s go get that money from Susie!”

    This is what I recommend: I think you should file an “innocent spouse” claim. I think you should qualify under the “separation of liability” claim. Here’s some more information: http://robergtaxsolutions.com/2013/06/innocent-spouse-relief/

    I would do that first before trying to make any kind of payment arrangement on that tax.

  25. I need some help here. I got a notice of wage garnishment through my employer that my wages would be garnished beginning next week for $2500 owed from 2009. I knew i owed this money but never got letters from irs. Guess they had the wrong address. I also have 5 years unfiled taxes. The irs is going to leave me with $192 a week. Not nearly enough for a single person to live on. I work two jobs and my pretax income is $500 weekly.

    Two questions. Will the irs also garnish from my 2nd job?
    How do i get the payments to a manageable level? Im thinking after i file back taxes with interest and fees i could be in excess of $10000 owed.

    Thank you

  26. Hi Jim,
    The first thing you’re going to have to do is file those back taxes. You can’t establish any kind of payment arrangement without having your returns filed. You can estimate your monthly payments by taking the amount you owe and divide by 72 months. If you owe $10,000, that would be about $140 a month.
    If you can’t afford that, you might be able to negotiate a lower payment amount by completing a form 433a and submitting some documentation to the IRS to prove that you can’t afford that much. You should probably get some help with that.
    Will the IRS garnish your second job? I doubt it, but you don’t want to take any chances. File those back taxes and get your payment agreement set up as quickly as possible.

  27. I started a yogurt store business in June 2010. Around Jan 2012 I’ve decided to close my business because my daughter was diagnosed with a very rare brain abnormaity. Unfortunately, she passed away in 2014. All this time I thought the accountant mailed the final sales tax return, however I was being told that I owed thousands of dollars to the IRS. The business was still operating for years ’til I was able to speak to one of the agents from the IRS. The only thing now is they kept telling me to just pay this and they will close the case and they didn’t allow us to get our NYS tax refund. I needed someone to help me understand the situation. I don’t have nothing to do with the money I owe them. Its too stressful thinking of what to do and who to talk to. Please someone help me. Thank you.

  28. Hi,

    If I owe the IRS for two years in a row, and had a previous agreement with them,is there any chance they will allow me to make an agreement on the second balance? I have upped my withholdings this year and should not owe anything.

  29. Hi Meryl,
    I’m so sorry about your daughter. Nothing can ever make that right. Often, people get into tax trouble when they are dealing with major family issues like death and divorce.
    It sounds to me like you have a couple of separate tax issues. Sales tax is usually handled by the state. The IRS handles federal taxes. So you’ve got some crossover here.
    My best advice is to meet with a tax professional, bring her all of the letters you’ve received from the various taxing agencies, and copies of the tax returns that were filed and have them get you all sorted out.
    You will have to pay for some help, but I think that in your case it will be money well spent.

  30. Hi Johnta,
    It can’t hurt to ask. Since you’ve only had two years of tax issues and you’ve got your withholding all straightened out, I’m thinking you should be able to work something out. Good luck.

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