Delay the Computerized Notices to Buy Time
If You Need to Buy More Time In Order To Pay and You Are Willing to Pay In Full, This Option Could be Good For You
Some people don’t realize actually how easy it is to buy more time once the IRS’s computerized collection process begins. There is no need to lengthy explanations or excuses; it is as simple as just asking.
When you receive the bill and cannot pay, simply write back and send a letter with the bill stating that you cannot pay right now and ask for an additional 45 days to pay. Forty five days is the maximum amount of time that can be entered into the IRS computerized notice cycle to suspend the notices. This will buy some time until you receive your next notice. If you still cannot pay by then, simply do the same thing again, but try to pay a small amount of the bill to actually show them that you are trying to pay. This should hopefully buy you the time you need in order to pay off the tax debt without entering into a payment plan. You can see this as using the IRS system to make your own payment plan. Sometimes the IRS will even give you more than the 45 days, the IRS is known to be extremely inefficient and you could actually receive a year or more to pay off your balances before you receive your next letter.
If you need more than 45 days it is in your best interest to enter into some sort of payment plan with the IRS to decrease the amount of penalties and interest that add to the total amount of taxes you owe. By entering into a payment plan the penalty amount will be cut in half. You can follow this guide on entering into a payment plan with the IRS.
Keep in mind, once you receive CP-504, there will be one more notice following this before the IRS can take your assets, so be sure to act before then. If you fail to pay, you will then enter the automated collection system and the IRS.
IRS Payment Extension Help & Info
IRS Short Term Payment Extension
Additional information on requesting an extension from the IRS to pay back taxes. This is an option if you need an additional 30-120 days to pay taxes owed.
Options When You Cannot Pay Taxes On Time
Here are 5 different methods that can be used if you can’t pay your taxes when due. Pick the best method for your situation.
IRS Collection Process
Once taxes have been assessed and not paid, the IRS collection process begins. Understand how this process works and what you can expect if the collection actions have already started on your account.
What do you do if you receive a letter from the IRS?
If you have unpaid taxes it is likely that you will begin receiving letters from the IRS. Here is an overview of common tax letters and what actions should be taken when certain letters are received.