Owing money to the IRS can feel overwhelming—but you’re not alone. Every year, millions of taxpayers find themselves with a balance due when filing their returns. The good news is that the IRS offers several options to resolve tax debt, and with the right guidance, you can take control of the situation before it spirals.
Why You Might Owe the IRS
There are many reasons why a taxpayer may end up with a balance due, including:
- Under-withholding or estimated tax shortfalls: If too little tax is withheld from your paycheck—or if you’re self-employed and underpay estimated taxes—you may owe when filing.
- Unexpected income: Freelance work, side gigs, or investment gains can create tax liabilities if not properly planned for.
- Disallowed deductions or credits: Sometimes the IRS adjusts a return, removing deductions or credits, which increases the tax owed.
- Penalties and interest: Even a small balance can grow quickly if left unpaid, as the IRS adds penalties and daily compounding interest.
What Happens If You Don’t Pay
Ignoring a tax bill is the worst option. The IRS has powerful collection tools, including:
- Liens against your property
- Levies on wages or bank accounts
- Seizure of assets in extreme cases
- Damage to your credit and financial standing
Taking action early can prevent these consequences and often leads to more favorable resolutions.
Options for Resolving IRS Debt
The IRS provides several pathways to manage or reduce your tax debt:
- Full Payment: Paying the balance in full stops penalties and interest from growing.
- Installment Agreement: A monthly payment plan that allows you to pay over time.
- Offer in Compromise (OIC): In some cases, you may settle your tax debt for less than the full amount owed if you can prove financial hardship.
- Currently Not Collectible (CNC) Status: If you cannot pay without causing financial hardship, the IRS may temporarily pause collection efforts.
- Penalty Abatement: In certain situations, penalties may be reduced or removed.
Why Professional Help Matters
While the IRS offers these programs, navigating them can be complex. Each option has strict eligibility rules, documentation requirements, and potential pitfalls. A tax professional can:
- Evaluate which resolution strategy best fits your situation
- Negotiate directly with the IRS on your behalf
- Protect your rights during the collection process
- Help you avoid future tax problems through proactive planning
Take the First Step Today
If you owe the IRS money, don’t wait until penalties and interest pile up. The sooner you act, the more options you’ll have. Our firm specializes in helping taxpayers resolve IRS debt and move forward with confidence.
Contact us today for a confidential consultation and let us help you find the best path forward.
Disclaimer:
This post does not constitute legal advice and does not create an attorney-client relationship, it is merely a general discussion of points of the law and may not be complete or up to date. Please contact our office for a consultation to discuss how tax laws may be relevant to your specific situation.