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Payment Options For Resolving A Federal Tax Debt Or Lien

Taxpayers subject to an IRS tax lien have options to pay their delinquent tax debt. The representation of an experienced debt resolution attorney may assist any taxpayer dealing with the IRS to understand all of their options in resolving an outstanding tax debt, even if secured by a federal tax lien. If a taxpayer or his or her attorney has negotiated an offer-in-compromise (OIC) to pay off a delinquent tax debt, a taxpayer may choose to pay the offer amount in a lump sum or in installment payments. Even if an OIC has not been negotiated, a taxpayer may pay off a tax lien in installment payments.

If financially unable to pay a tax debt immediately, taxpayers may make monthly payments through an installment agreement. It is crucial to know that before applying for any payment agreement, a taxpayer must file all required tax returns and pay all future taxes due in-full and on time. Further, any future refunds will be applied to a tax debt until paid in full.

Regarding an offer-in-compromise, a taxpayer may make payments pursuant to a “lump sum offer” or “periodic payment offer” accepted by the IRS. Any amounts paid as a lump sum or in periodic payments are nonrefundable. A taxpayer has a right to specify the particular tax liabilities to which any periodic payments will be applied.

A “lump sum offer” is defined as an offer payable in five or fewer installments and within 24 months after the offer is accepted. If a taxpayer submits a lump sum offer, the taxpayer must include with Form 656 a nonrefundable payment equal to 20 percent of the offer amount.

A “periodic payment offer” is payable in six or more monthly installments and within 24 months after the offer is accepted. When submitting a periodic payment offer, the taxpayer must include the first proposed installment payment with Form 656, which is required in addition to the $150 application fee.

The attorneys at Loan Lawyers may help any taxpayer negotiate a resolution of a delinquent tax debt. If you have questions about the IRS Offer-In-Compromise Program, call Loan Lawyers. Our South Florida consumer rights and debt defense attorneys help individuals with problems related to the payment of their debts. If you have assets subject to an IRS tax lien, we can help. Contact our office today by calling (888) FIGHT-13 (344-4813) and see how we can help.
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