In the wake of the COVID-19 pandemic, many Americans have been struggling to pay their taxes. The IRS has recognized this hardship and has implemented payment agreements to help taxpayers who are unable to make their payments in full.
An IRS payment agreement, also known as an installment agreement, is a plan that allows taxpayers to pay their taxes over time instead of in one lump sum. These agreements can be beneficial for those who cannot afford to pay their taxes in full or who need more time to pay.
During the pandemic, the IRS has expanded its payment agreement options to provide more flexibility for taxpayers. One of the most significant changes is the suspension of some IRS collection activities, including the use of liens and levies, through July 15, 2020.
Additionally, the IRS has increased the amount of time taxpayers have to pay their taxes under an installment agreement. Typically, taxpayers have up to 72 months to pay their taxes in installments. However, the IRS has extended this time frame to 84 months for taxpayers who owe less than $250,000.
If you are struggling to pay your taxes, it is essential to contact the IRS as soon as possible. The IRS has a variety of payment agreement options tailored to fit different financial situations. Some of these options include:
– Short-term payment plan: This plan allows taxpayers to pay their taxes in full within 120 days.
– Long-term payment plan: This plan allows taxpayers to pay their taxes over time, typically up to 72 months.
– Offer in compromise: This plan allows taxpayers to settle their tax debts for less than the full amount owed.
– Currently not collectible: This plan allows taxpayers to defer their tax payments until they are in a better financial situation.
When setting up a payment agreement, it is essential to be honest with the IRS about your financial situation. The IRS may request proof of income and expenses to determine the most appropriate payment plan for you.
In conclusion, if you are struggling to pay your taxes during the COVID-19 pandemic, the IRS has payment agreement options to help. Contact the IRS as soon as possible to discuss your options and find a plan that works for you. Remember to be honest about your financial situation and provide any necessary documentation to ensure the best outcome.