No one enjoys finding out that they owe the IRS money, but once they do, they want to pay it off as soon as they possibly can. However, there are times when you find out your tax is due and you don't have enough cash on hand to pay it. When that happens there's no need to panic, you may need to take advantage of the IRS.gov Online Payment Plan. This is a program set aside to help those who are not financially able to satisfy their debt to the government.
The Online Payment Agreement:
In order to take advantage of the IRS.gov Online Payment Plan you must meet minimum eligibility requirements. This is different for individuals and businesses but if you meet the requirements then you can arrange to pay the amount owed over an extended period of time. For individuals, you must owe less than $50,000 in combined income tax debt, penalties, and interest and have filed all of the necessary forms with the IRS. For businesses the amount owed must be less than $25,000.
If You Don't Qualify:
Even if you don't qualify for the payment plan there are steps you can take to get special permission from the IRS. You must file a Form 9465, Installment Agreement Request and a Form 433-F, Collection Information Statement and submit them both to the IRS requesting for an exception. You may have to wait up to 30 days for the IRS to reply. If you aren't willing to wait for their response you can call them directly at 1-800-829-1040 and speak to them directly.
Avoid Default:
Once you've been approved for the IRS.gov Online Payment Plan you want to make sure that you avoid defaulting on the agreement at all costs. Once you default your agreement could be cancelled and you'll be expected to pay the entire balance in full along with penalties and interest. If you want to have your plan reinstated then you'll also need to pay reinstatement fees as well.
So, it would be in your best interest to pay at least the minimum monthly balance every month before the due date. To make sure that your payment is credited to you when you make payment be sure to include the Social Security number, your daytime phone number, the tax year, and the type of return your payment is being applied to. It is also important to not take the agreement for granted if you find that a future tax year yields you a refund.
No one is happy when they learn they have to pay the IRS for back taxes but there are plans in place to help you to meet that obligation without having to suffer penalties for it. However, never take those privileges for granted that way you won't have to worry about negative consequences in the future. So, once you find that you owe taxes you can take solace in knowing that there are things you can do even if you don't have the money on hand to meet your obligation.