You’ve done the hard work of establishing a monthly IRS installment plan — and until recently, you’ve managed to make every payment on time. That all could change if an emergency situation comes into play. Below, we highlight your best options for handling emergencies that make it impossible to pay your IRS installment on time:
Change Your Monthly Payment
Perhaps, when you initially set up your installment agreement, you opted for a short-term, higher-payment approach in hopes of knocking out your debt as quickly as possible. If your circumstances have changed, you may be eligible for lower monthly payments that could remain well within reach, regardless of your current financial situation. The Online Payment Agreement tool may allow you to change your monthly payment amount with minimal hassle.
Seek Currently Not Collectible Status
In the event of a financial emergency, the IRS allows your account to be deemed currently not collectible (CNC). Under this approach, collection can be temporarily delayed. CNC status is far from easy to achieve, however. You will need to provide extensive evidence of your current financial status. Also, keep in mind that your debt may continue to increase while your account remains CNC.
Remember, it is always in your best interest to keep in touch with the IRS when financial circumstances get in the way. If you’re worried about contacting the IRS directly, an enrolled agent can deal with the agency on your behalf. A viable solution may be well within reach.
If an emergency tax situation arises, don’t panic; contact the Highland Tax Group to get a better sense of your options. We can help you determine how to get back on track with your IRS installment agreement while avoiding potentially harsh penalties.