How to Deal With an Unpaid Tax Invoice
It’s tax season again – and for some people, it’s an unpleasant reminder that they still haven’t paid their debt for the previous tax year.
There are many reasons why you might owe money to the IRS. You may not have been withholding enough money from your paycheck; You may have started a freelance job and haven’t saved enough money for your estimated quarterly taxes. You may have been doing side jobs (such as driving an Uber) and not even realizing that you have to pay estimated quarterly taxes. You may be accustomed to receiving a certain amount of money each year in tax refunds, and the Tax Cuts and Jobs Act left you more money each month in your paycheck and tax bill that you didn’t expect.
Regardless of how you ended up in debt to the IRS, there is only one good way to get rid of it: contact the IRS by phone or online and set up a payment plan.
As Michelle Singletari explains in The Washington Post :
If you owe federal taxes and cannot pay them, the first thing you should do is call the IRS.
Don’t call the number you see on your TV screen or the number you hear in a radio ad. Make the IRS your first stop to avoid being scammed. Because, contrary to claims in the commercials promising quick relief, private companies are unlikely to be able to reduce your tax debt to a dime a dollar.
If you have unpaid taxes, the IRS will mail you a debt notice . (Remember: the IRS will never call you to discuss unpaid taxes. If someone calling you the IRS calls you, they are actually scammers.)
Your debt notice will contain instructions on how to contact the IRS and start paying your tax bill. You can call the IRS directly to discuss options or apply online for a payment plan . You can also apply by mail (using Form 9465, Hire Purchase Request ) or visit the IRS office.
In many cases, the IRS will allow you to pay the balance in installments; in some cases, you may even be eligible for a reduction in your tax bill (this is called a “compromise offer”). You can also request a temporary payment grace period until you can better cover the costs.
It is important to remember that you must contact the IRS and work out a way to pay off the unpaid tax balance. If you ignore the notice of the maturity of the balance, the IRS could go so far as to increase your salary in order to receive the amount due, not to mention that the unpaid tax invoice charges both interest and penalties, so payment of the bill will be in your benefit. turn off as quickly as possible.
So call the IRS. Today, if you can. Or, if you don’t like phones, start setting up your data plan online.