What to Do When You Owe the IRS for 2021 — And You Already Have a Balance: Part II
Keeping up with IRS obligations for 2021 may feel downright impossible if you’re already burdened with tax debt. Thankfully, multiple options are available for addressing both new and previous tax issues.
In our previous blog post devoted to this topic, we provided a broad overview of the role that installment agreements can play in resolving multiple years’ worth of tax debt. Next, we’ll dive into details, highlighting the unique pitfalls that can accompany amended installments, as well as potential alternatives.
Is IRS Form 9465 the Only Option For Updating Installment Agreements?
If complicated circumstances make it difficult for you to quote a particular figure for line 6 of IRS Form 9465, don’t panic. As we recommended in the previous blog on this topic, an enrolled agent can be a great resource in this situation.
You can also make adjustments during an appointment with your local Taxpayer Assistance Center. With either approach, time is of the essence, as the IRS may otherwise default the previous agreement once a new balance arrives.
What About Installment Alternatives?
While amending your installment may seem like the go-to solution, it is not necessarily the only option for resolving tax debt accrued during multiple years. In some cases, it’s worth trying for an offer in compromise instead.
Depending on how much you add to your tax debt in 2021, this may be a more realistic option, assuming you cannot possibly afford to keep up with the revised installments — or if you never got around to creating an installment plan in the first place. If you’re not sure how to proceed, it’s worth your while to discuss your situation with a tax expert.
No matter which solution you ultimately select, you’ll want to keep in touch with the IRS to avoid defaulting on your existing agreement. Remember, an enrolled agent can handle this communication on your behalf.
Not sure which tax debt strategy is best for your personal situation? The Highland Tax Group can help you determine the best approach. We offer a variety of tax resolution services designed to make dealing with the IRS less stressful. Contact us today to get started