Taking a look at recent years, it can be agreed that the Internal Revenue Service (IRS) has been more open to working out late tax payments, usually by installment agreements. But you have to address the problem up front, be proactive in how you negotiate, and not keep the IRS waiting. There are several options available and the steps you can take. Points to note

• The IRS gives several options for repaying back taxes under its Fresh Start program.
• There are three options available for taxpayers: an installment-payment plan, an offer in compromise, and a temporary delay in collection.
• Being proactive about resolving your back-tax issues and never missing repayments if you opt for an installment plan is very vital.

A Fresh Start for Tardy Taxpayers As far back as 2011, the IRS rolled out its Fresh Start Program intended towards giving late-paying Americans a path back towards paying off their tax liabilities. The IRS Commissioner once said, “We are making fundamental changes to our lien system and other collection tools that will help taxpayers and give them a fresh start”. “These steps tend to benefit people facing tough times, and they show a responsible approach for the tax system. The IRS mainly focused on the following changes:

• Increasing the dollar threshold significantly when liens are generally issued, resulting in fewer tax liens.
• Making it easier for taxpayers to get lien withdrawals after paying a tax bill
• Withdrawing liens in most circumstances where a taxpayer enters into a Direct Debit Installment Agreement.
• Creating a better access to installment agreements for more striving small businesses
• Expanding a streamlined Offer in Compromise program to cover more taxpayers

Ensure to File Your Return Always The relevance of filing your tax returns always cannot be overemphasized. The IRS offers more options for striving taxpayers which have been really helpful. Nonetheless, you still have to do your bit as well.  How the IRS Proceeds with Late Payments The IRS will not immediately go after you for delinquent tax penalties and interest. In many cases, it will take up to months before the IRS starts collection efforts. When they eventually commence the process, collection efforts can seem benign, comprising of just computer-generated letters. It will get a point, however, the IRS will begin very aggressive collection methods, including wage levies in which the government gets in touch with your employer advising that you have delinquent tax liabilities and that any wages that ought to be paid to you should be paid to the IRS instead. In short, once the IRS commences aggressive collection activity, your reputation can be damaged and you can be crippled financially. Options for Late Payers It is advisable that you should not let things get to that point. You should ensure to respond as soon as you get the first back-taxes notice. Basically, taxpayers there are three options for paying back taxes:

• Under an installment agreement, a taxpayer pays the amount due over a period of time.
• An offer in compromise involves the taxpayer paying one lump sum in an amount that is less than the amount actually owed.
• The taxpayer can request that the IRS temporarily holdup collection until the taxpayer’s financial situation gets better.

  Keep in mind that a temporary delay in collection will lead to increment of your tax debt because penalties and interest are charged until you pay the total amount. The IRS is generally quite amenable to any of the above. Whether it will accept an installment agreement request or an offer in compromise, or a collection delay depends largely on your financial condition. You will have to fill out forms that confirm all your assets and liabilities, your sources of income, and your debts. If you have the money or means to pay your tax bill, the IRS likely will not compromise much. Go for an Installment Agreement Setting up a payment plan is probably the suitable way to go, resulting in the least cost and detriment to you. Note that when you submit a request to the IRS for an installment agreement, you will have a better chance of a successful outcome if you:

• Let the IRS know you’ll pay the debt off within the period of six years, but ideally within three years.
• Aim high. The monthly payment you give should be equal to or higher than what the IRS believes it can collect from you from a negotiated agreement that it initiates.
• The usual monthly tax payment you initiate to the IRS should be tied to existing IRS criteria. For example, you should deduct household expenses from your total income. Then draft a check for the difference to the IRS.

It should be noted that even with an agreed-upon payment plan, penalties and interest keep accumulating until the back-tax balance is paid in full. Stick to Your Payments It is very essential that you make your payments on time to the IRS. If you breach the terms of your arrangement, the IRS will attach and seize property that you own, together with bank accounts and even putting a lien on your home. The amount in set-up fees for IRS payment plans, based on how long you take to repay However, in cases where you are having problems making your installments, speak to the IRS. You should be able to work through it. Being straightforward with the IRS is very vital as it does not like surprises. Obtaining Professional Help Obtaining help from a professional tax representative is usually a significant step in negotiating the most favorable possible compromise or installment agreement. With that in mind, you need to be cautious of “pennies on the dollar” firms or 1-800 number firms that advertise on late-night television. “In many cases, these firms will simply take a client’s money and carry out no or minimal services,” he explains. Many of these firms have been prosecuted in their states of origin for illegal and deceptive business practices. If you are interested in seeking the help of a tax representative, interview two or three potential firms in your city. Ensure that IRS tax controversy and IRS collection resolutions are their areas of strength. Many attorneys and Certified Public Accounts (CPAs) do tax planning but seldom interface with the IRS. It’s vital that your representative has good level of professionalism negotiating with the IRS in back-tax payment cases.