Tax debt under $25,000 could qualify you for a payment plan of up to sixty months. You request it but it can be withheld due to unfiled returns. Debt of more than $25,000 must be worked out with the ACS.
Have a strategy prior to contacting a collector. Make any excuse not to talk if they contact you first. Say you’ll get back to them. If you don’t have facts and figures don’t reply to any questions except your name.
When you contact a collector have your income, living expenses, assets and debt data. The information is akin to IRS Form 433-A & -B, Collection Information Statement for Businesses, Self-Employed Individuals and Wage Earners. Your objective is to present an organized list of your finances for more time to pay. The collector wants all tax money paid quickly.
When you call the collector, be prepared to wait. Take down his name and ID. Write down notes. You could speak to a different collector each time you call. Some may be more sympathetic than others. You must emphasize why it’s difficult to meet your expenses e.g. a low income. Be truthful regarding assets. Cut short tricky questions such as a second income with a plausible excuse. Rather promise to call back later.
The collector may grill you regarding home equity, other real estate, bank balances and if you qualify for credit. He wants to get you to pay your tax debt in full but may not force you to take a loan. If he thinks you can pay, he will expect payment within thirty days. If not, you could get a monthly payment plan also called an installment agreement (IA). You may have to give over pay slips, rent receipts etc to back it up. Complete a Collection Information Statement. If you made a verbal agreement, follow through. Pay on time even if the IRS monthly billing is late.
