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Why You Should Work with a CPA to Establish an IRS Payment Plan

Why You Should Work with a CPA to Establish an IRS Payment Plan

  • Oct 01, 2022

Nameplate on desk with CPA written on itIf you’ve fallen behind on your taxes, it’s important to establish a payment plan as soon as possible. The longer you go without a payment plan, the more severe your situation will get. You’ll accumulate more interest with each passing month, and instigate additional collections actions, like tax liens on your property, bank levies, and even wage garnishment. While it is possible to apply for an IRS payment plan on your own, it’s typically a far better idea to work with a qualified and experienced CPA. How does a CPA make a difference? Keep reading to find out.

Know What You Qualify For

One of the most important parts of successfully applying for a payment plan is understanding which plans you would actually qualify for. Applying for a plan for which you don’t actually meet the qualifications will not only waste your time, but you’ll be paying application fees that you won’t get back when your application is denied. A CPA has a thorough understanding of the different types of plans and what the requirements are for each one. They can recommend the best tax settlement plan for you, whether that be a long-term payment plan, offer in compromise, or something else altogether.

Apply More Quickly

As we’ve already stated, time is of the essence when it comes to settling your taxes. The more time you take to submit your application to the IRS, the longer you’ll spend accumulating interest on your debt. A CPA is incredibly experienced with the application process for every type of payment plan. This will allow you to not only select the right payment plan, but apply for it sooner, so you can get your finances back on track even more quickly.

Make the Right Offer

If you hope to qualify for an offer in compromise (OIC), it’s incredibly important that you make the right offer amount to the IRS. This amount must be a balance between what you believe you can afford and what the IRS believes they can reasonably collect from you throughout the life of the debt. A CPA is able to guide you through the proper calculations so that you can make an offer that is more likely to be accepted by the IRS.

Reapply After Rejection

If you apply for an IRS payment plan and are rejected, they don’t typically provide you with an explanation for why the rejection occurred. Many people would simply assume that the rejection was final, and they could do nothing else to receive a payment plan. However, with a little professional guidance from a CPA, you can more easily determine the reason for your rejection, adjust your application, and reapply more quickly. You may even be able to determine a different type of payment plan for which you’re better qualified. Your ability to adapt quickly can provide you with that coveted payment plan even sooner than you could manage on your own.

Consider Alternative Options

When you’re struggling under the weight of tax debt, and the collection actions and accumulating interest that comes with it, it can be hard to think through all of the options available to you. And, with the complexity of the tax system, it can be extremely difficult to even begin to understand the various options you have. In addition to IRS payment plans, there are other options available to some taxpayers, such as setting a “currently not collectible” status on your account that will stop all collection actions against you. This can be a way to give yourself some breathing room to reorient your finances, or simply take off the pressure while you work through a payment plan application.

Taxpayers who are undergoing extreme financial hardship can also qualify for a hardship extension, which will give you extra time to pay your taxes, so that you can hopefully get back on your feet. A CPA can walk you through all of the options available to you based on your unique circumstances. By fully understanding your choices, you will be better equipped to make the best decision for you and your family.

Get Help Settling Your Tax Debt

If you have unpaid tax debt, the IRS Advocates can help you to understand your options for settling your debt, and guide you through the application process. We never take a case unless we know we can help you. Contact us today to receive a consultation and learn what your options are for getting out from under your tax debt and taking control of your financial life again.



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