As of 2018, 14 million people owed money to the IRS, and individuals who fail to pay back taxes could face penalties such as jail time or passport restrictions. However, there are many steps that an individual can take to avoid some or all of those penalties. For instance, a person who cannot pay a tax bill by the original due date can ask to enter into an installment agreement.
This allows a person to pay down a past due income tax balance over a period of several months or years. Those who don’t have enough money to pay what they owe may be able to ask the IRS to reduce or eliminate their balances entirely. If the government denies a request to reduce a principal balance, it may agree to waive interest or penalties that have accrued on it.
Taxpayers are encouraged to review notices that they receive from the IRS to ensure that they have actually been sent by the federal government. It is also important for taxpayers to verify that they owe the government money before writing a check or otherwise attempting to settle the debt. Taking these steps may help a person avoid becoming a victim of identity theft or other types of fraud. Those who have questions about a notice may want to contact the IRS or a tax professional.
Individuals who receive notices from the IRS may wish to dispute the fact that they owe the government money. An attorney may be able to use receipts and other evidence provided by a taxpayer to show that a person paid an income or payroll tax debt in a timely manner. In some cases, an audit may reveal that a taxpayer is entitled to a larger refund in a given tax year.