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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 13335
Experience:  15years with H & R Block. Divisional leader, Instructor
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I owe around 9,000 in back taxes that I cannot pay. I have

Customer Question

I owe around 9,000 in back taxes that I cannot pay. I have no way of getting the money to pay it off. I unfortunately tried the installment plan but defaulted to due medical debt I was trying to pay off. So I now I just need answers on what my next step should be.
Submitted: 1 month ago.
Category: Tax
Expert:  Robin D. replied 1 month ago.

Hello, I'm Robin. Welcome to JustAnswer. I'm reviewing your question now and typing up my reply. I'll post that in just a few moments.

Expert:  Robin D. replied 1 month ago.

If you are in no position to pay your living expenses and the tax debt then you may be placed in Currently Not Collectible status.

If the IRS agrees that you can’t both pay your taxes and your reasonable living expenses, it may place your account in Currently Not Collectible (CNC) (hardship) status.

While your account is in CNC status, the IRS will not generally engage in collection activity (for example, it won’t levy on your assets and income). However, the IRS will still charge interest and penalties to your account, and may keep your refunds and apply them to your debt.

You can call the number on the last statement you received and speak to an agent.

Customer: replied 1 month ago.
Do you think they would possibly settle if I could come up with a lump sum of what I owe to close it out ?
Expert:  Robin D. replied 1 month ago.

They could accept an offer in compromise (settle). The amount would be based on what they think you could pay in the future.

If the amount offered represents the most they can expect to collect within a reasonable period of time then they will accept it.

Expert:  Robin D. replied 1 month ago.

You can use the Offer in Compromise Pre-Qualifier to confirm your eligibility and prepare a preliminary proposal.

Submit your offer

http://irs.treasury.gov/oic_pre_qualifier/

I hope this has been helpful