It is possible to earn an extension of time to file or time to pay from the Internal Revenue Service, but take note that it's a challenge. Prior to looking into an IRS Extension, you'll must evaluate every available IRS payment option, and then choose the one that works best for you. IRS Extensions aren't always the best option. There exist various IRS payment option types to take into consideration, like an IRS settlement, which is different from an IRS extension, but can settle your IRS issues nonetheless. Continue reading for tips on how to learn which IRS Payment Option will do the best job in your situation.
What Are IRS Extensions?
A true time extension to "pay" the IRS isn't available. You're allowed to get extensions of time to file your income taxes, but there's no IRS Extension of time to pay prior to the due date passing. Be sure to pay off the taxes you owe the IRS ahead of the April 15th due date to steer clear of owing the Internal Revenue Service even more in interest and penalties. You don't have the ability to get a time extension to pay what you owe. Therefore, it's advised that you file and pay your taxes before the deadline.
IRS Extensions: "Currently Non Collectible (CNC)"|"Currently Non Collectible" Status
If you presently have an IRS tax debt, there is one IRS payment option to consider, that is akin to the IRS extension. It also will get you additional time to get your financial situation on track without having to put up with IRS collections. This is referred to as "Currently Non Collectible" status, and if you qualify, it can buy you some time with the IRS.
You must definitively verify that it's impossible that you can make your payments on your back tax debt. Show the Internal Revenue Service that this status is the sole solution for you by demonstrating that you'd be unable to pay anything on your IRS debt without sacrificing an essential necessity. Included under essential basics are groceries and rent. That's it. This is why only a real hardship will meet the requirements for this option.
Your IRS Payment Options
As was stated, IRS extensions are not always your best option. For that reason, it is suggested that you take a look at which tax debt resolution option with the IRS would work best for your circumstances There are many IRS payment option types to choose from; we'll review 2 of the most popular ones in this article.
An IRS Installment Agreement allows you to pay the Internal Revenue Service in monthly payments. Keep in mind that there are a few key differences between this payment option and how you may have paid your other creditors. For one, how much you're going to pay is decided by the IRS, with that determination based on your financial information. They are going to look at your earnings and how much your day-to-day basics cost. The difference will be demanded as satisfaction of what you owe. This is a good option if you're capable of affording it.
IRS Payment Option: IRS Settlement
Only those who cannot pay their debt in full before the time the IRS has left to collect on the Tax Debt expires will have the luxury of an IRS settlement. A tax debt settlement lets you settle your back tax debt for a lot less than you really had due to the IRS. The amount the Internal Revenue Service will allow you to settle for will vary, depending on your situation. If you are able to afford making payments toward your debt until the statute of limitations comes to an end, the Internal Revenue Service will not let you get an IRS Settlement.