Are Back Taxes Negotiable?

January 26, 2017

If you owe the IRS money on back taxes, it can be a very stressful financial situation. If you’re wondering if your back taxes are negotiable, the quick answer is yes. You can negotiate your back taxes and how you pay them back. There are a few ways back taxes can be negotiated, and not all options work in every case. Here are the ways back taxes are negotiable.

Offer in Compromise

The “Offer in Compromise” option or OIC is available to help you make a settlement with the IRS to pay a portion of your back taxes. The offer in compromise option is what you may hear all over late-night television saying “we can help you eliminate your back taxes for pennies on the dollar”. In reality, this option isn’t available for the majority of cases involving back taxes—but it can work for some. Don’t fall for those late-night infomercials though, get in touch with your trusted Maryland CPA to take advantage of an offer in compromise to negotiate your back taxes.

An IRS Payment Plan

The IRS isn’t all bad. They are willing to work with you in a way that allows you to make payments on your back taxes as opposed to owing everything in one lump sum. Obviously, this isn’t the most advantageous outcome for you, but it will allow you to keep your head above water while keeping the IRS at bay. The only thing to remember is to make your payments every month and you’ll be fine.

Credit Card Payment

The IRS will try to push you to pay off your back taxes with a credit card payment to them. This isn’t something we strongly recommend as the interest on credit card payments can be higher than the interest on an IRS payment plan. That said, there are some credit card deals available which allow you to do balance transfers and offer 0% interest for 12-18 months. Again, we suggest you don’t go this route, but it would be remiss of us not to pass this information along.

Contact a Maryland Tax Accountant

Your local Maryland tax accountant will be able to help you navigate back taxes owed to the IRS. Here at Relate CPA, we know how frustrating it can be to deal with the IRS—we’ve been doing it for a long time. A professional tax accountant like Relate CPA knows the ins and outs of tax law and can help you figure out the best outcome for your situation. This is why if you’re ever in a situation where you owe back taxes you cannot afford to pay you should contact your CPA immediately.

At Relate CPA, we can help you deal with back taxes owed to the IRS, and relieve the stress associated with them. We know how difficult it can be to deal with the IRS and the last thing you want to do is make a mistake. If you need personal tax services, fill out the form on our website or give us a call at 410-753-4899.