Don’t panic…..you have options! The first piece of advice I would give is do not ignore the IRS. Contrary to what many people think, they will work with you. The IRS does not want to take your car, house or seize your bank accounts. They want you to pay your taxes.
Therefore, if you cannot pay, you can make payment arrangements. The IRS will allow you to pay your balance off in monthly installments. As long as you make your monthly payments as scheduled, they will not bother you.
Here’s how it works. You determine how much you will be able to pay each month and what day of the month you’d like your payment to be due. You then submit this information to the IRS and they have the option to approve or deny your installment. However, most installments are approved. Others are slightly altered. If the payment amount you are requesting is too low, they might suggest you pay more. Keep in mind, when requesting an installment agreement, make sure you request a monthly payment you can afford. It is better to pay more than less. If you miss a payment or pay less than your scheduled amount, it forfeits the installment agreement. If that happens, you will have to setup another installment agreement. Although, setting them up is not difficult, they are not free. Each time you have to setup an installment agreement there’s a fee.