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Marvin,EA, Enrolled Agent
Category: Tax
Satisfied Customers: 1672
Experience:  Enrolled to Represent Taxpayers Before The IRS
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I recently filed 10 years worth of tax returns and the IRS

Customer Question

I recently filed 10 years worth of tax returns and the IRS says I owe 18,000. It doesn't match the figure I came up with at all. Either way, I cannot possibly pay this amount. What can do?
Submitted: 8 years ago.
Category: Tax
Expert:  Marvin,EA replied 8 years ago.
Hello and thanks you for using Just Answer. The IRS charges interest and penalties on past due tax returns. This might be the reason why your figures does not match the IRS. If you cannot pay the full amount in five years you should apply for a Part Pay Installment Agreements (PPIA). PPIA allow the taxpayer relief from a portion of their debt, based on ability (or inability) to pay. Taxpayers who qualify will be able to make monthly payments in the amount negotiated with the IRS, even if those payments will not full-pay the debt by the end of Collection Statute.
Customer: replied 8 years ago.

The representative I spoke with mentioned "hardship" but this option involved a 10 year lein that would have a terrible impact on my credit. I just wan to make sure this is not the same thing. How do they determine whether a person is "able to pay" in 5 years?

Expert:  Marvin,EA replied 8 years ago.
If you can pay the tax owe within 5 years the IRS cannot file a federal tax lien against you.   You might have to complete a financial information statement for the IRS if you want 5 years to pay the $18,000 plus interest. Interest on the $18,000 compounded daily. If you cannot pay the balance due within 5 years or making the payment would create a hardship the IRS can report your account as Currently Not Collectible (CNC). The statute of limitations continues to run while your account is in uncollectible status but the IRS will file a federal tax lien against you that will have a negative impact on your credit.