Tax debt under $25,000 could qualify for a payment plan of up to sixty months. However, your request for a payment plan can be denied 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:
- In an event that a collector contacts you first, make an excuse not to speak with them- say you will get back to them. If you don’t have your facts and figures straight, don’t reply to any questions other than your name.
- The collector may grill you regarding your home equity, other real estate, bank balance(s), and if you qualify for credit. The collector wants you to pay your tax debt in full and may request that you take a loan. If he/she thinks you can pay your debt in full, the payment will be expected within thirty days. If you have proved that you cannot make the full payment, you could get a monthly payment plan also called an installment agreement (IA), however, you may have to provide pay slips, rent receipts, etc.
- The collector wants all tax money paid quickly. Your objective is to present an organized list of your finances for more time to pay off your debt. Have your income, living expenses, assets and debt data ready. The information is comparable to IRS Form 433-A & -B, Collection Information Statement for Businesses, Self-Employed Individuals and Wage Earners documents.
- Be prepared to wait when calling the collector. Write down his/her name and ID number. Take notes; you could speak to a different collectors each time you call. Some collectors may be more sympathetic than others so emphasize why it’s difficult to meet your expenses e.g. low income.
- Complete a Collection Information Statement. If you made a verbal agreement, follow through. Pay on time even if the IRS monthly billing is late.