If you’re a typical American, you get a refund from the federal government at tax time. But if you are one of the few who owes taxes, paying the balance can be very difficult, especially if you have back taxes owed from previous years. Don’t ignore the problem! Generally, the IRS can charge you a monthly penalty of 1/2 percent for approximately four years for paying your taxes late.  Constantly accruing penalties and late fees make paying the balance off harder and harder, and maybe even impossible, without assistance.  Unfortunately, the IRS has greater authority to collect back taxes from you than other creditors do for ordinary consumer debts.  Thankfully, though, there is help available for you if you need it.

Contact the Internal Revenue Service if you need any help settling back taxes, especially if you can’t immediately pay your balance in full. You can discuss your financial situation with an IRS representative who will work with you. The IRS is very accessible for United States taxpayers. If you live in the United Kingdom or some other country, do the same within your own country if you do not pay taxes to the United States, as the IRS will not be able to help you.  You want to seek professional advice before you take this step however.

Before you send a check to the IRS, request a temporary delay and make arrangements for payment installments, and ask about the rules for an installment agreement, especially if you can’t afford to pay the balance of your back taxes in full. Don’t worry; the IRS will grant you a temporary delay if that agency deems your financial situation eligible. However, keep in mind that late fees and penalties may still continue to accrue throughout the duration of any installment agreement or temporary delay. If your back tax balance is $25,000 or less, the IRS is more likely to accept your installment request, but the monthly payments you offer to make must satisfy the entire debt within 60 months in most cases. To make the request, you must prepare IRS Form 9465 and provide some details about your financial information.

Another option for you is to request an Offer in Compromise (OIC) to settle back taxes you owe for an amount lower than the expressed balance. Such a request may be approved if you have financial hardship, and can show it to be so.