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Having trouble paying your taxes? Here are 3 smart options to consider.
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Tax season is upon us, so you may be dealing with some extra stress due to the filing requirements, paperwork and potential tax payments. Things can get infinitely more stressful if you find that you owe money to the IRS, whether it’s a bill for this year’s tax filings or an IRS tax debt that’s lingering from years prior.
After all, the IRS can be quick to act when you owe them money. And, if you can’t afford to pay your taxes, whether it’s due to a job loss, miscalculation or unexpected expenses, the situation can quickly spiral into a nightmare of penalties, interest charges and aggressive collection tactics.
The good news is, though, that there are ways to get back on track and resolve your tax debt responsibly — even if you don’t have the cash on hand to pay the bill. Below, we’ll break down three smart options to consider.
Find the right tax relief service to help tackle your IRS debt here.
Having trouble paying your taxes? 3 smart options to consider
If you’re unable to pay off what you owe to the IRS, the following options may be worth considering:
Use a tax relief service
If you’re overwhelmed by the complexities of dealing with the IRS and navigating the maze of tax laws, you may want to consider enlisting the help of a reputable tax relief service instead. These companies specialize in negotiating with the IRS on behalf of taxpayers, working to find solutions that can reduce or even eliminate your outstanding tax debt.
Tax relief services can guide you through various programs and strategies for resolving your tax debt, such as installment agreements, offer in compromise, penalty abatement and innocent spouse relief. They have experienced tax professionals who understand the intricate rules and regulations, increasing your chances of a favorable outcome.
However, it’s crucial to exercise caution when choosing a tax relief service. Some less-than-reputable firms may make unrealistic promises or charge exorbitant fees, leaving you in an even worse financial situation. So, do your research, read reviews and ensure you understand the terms and conditions before engaging their services.
Owe money to the IRS? Explore your tax relief options online today.
Take the DIY route
If you prefer to handle your tax debt on your own or cannot afford the services of a tax relief company, there are several do-it-yourself options you can explore directly with the IRS. These include:
- An installment agreement: If you can’t pay your entire tax bill at once, the IRS may allow you to set up an installment agreement. This arrangement lets you make monthly payments over an extended period, usually up to 72 months. The IRS charges a user fee for setting up an installment agreement, but it’s generally more affordable than the penalties and interest that would accrue if you failed to pay.
- An offer in compromise: For those who truly cannot pay their full tax debt, the IRS offers an offer in compromise program. This allows you to settle your tax liability for less than the full amount owed if you can demonstrate a genuine financial hardship. During this process, the IRS considers your income, expenses and asset equity to determine an appropriate settlement amount.
- Currently not collectible status: If your financial situation is so dire that you cannot afford to pay anything toward your tax debt, you may qualify for currently not collectible status. This leads the IRS to temporarily suspend collection efforts until your financial circumstances improve, but interest and penalties will continue to accrue during this time.
- Penalty abatement: In certain cases, the IRS may be willing to waive or reduce penalties if you can demonstrate reasonable cause for your failure to pay or file on time. This could include circumstances beyond your control, such as a natural disaster, serious illness or erroneous advice from an IRS representative.
- Innocent spouse relief: If you filed a joint tax return with your spouse and they are solely responsible for the tax debt, you may be eligible for innocent spouse relief. This program can relieve you of the responsibility for paying taxes, interest and penalties if you can prove you were unaware of the incorrect filing or unreported income.
It’s important to note, though, that while these routes can be navigated alone, seeking at least some professional guidance can be invaluable, especially if your tax situation is complex or involves significant amounts of debt.
File for bankruptcy
In certain cases, filing for bankruptcy may also be a viable solution for resolving overwhelming tax debt. However, this decision should not be taken lightly, as bankruptcy carries significant long-term consequences for your credit and financial future.
In general, two types of bankruptcy can potentially discharge certain tax debts:
- Chapter 7 Bankruptcy: This form of bankruptcy involves the liquidation of non-exempt assets to pay off creditors, potentially including the IRS. Certain types of tax debt may be eligible for discharge under Chapter 7, such as income tax debts that are more than three years old.
- Chapter 13 Bankruptcy: With a Chapter 13 filing, you enter into a court-approved repayment plan to pay off your debts, including taxes, over three to five years. Any remaining tax debt may be discharged after completing the repayment plan.
It’s important to note, though, that not all tax debts are dischargeable in bankruptcy. Certain types of taxes, such as payroll taxes, fraud penalties and taxes for which a return was never filed, generally cannot be eliminated this way.
Additionally, bankruptcy comes with temporary credit score implications that could make it difficult to obtain loans, credit cards or even housing and employment. In most cases, it should be considered a last resort after exhausting all other options for resolving your tax debt.
The bottom line
Ignoring your tax debt is never a wise choice. The IRS has formidable collection powers, including the ability to garnish wages, seize assets and impose hefty penalties and interest charges. But by taking proactive steps and exploring the available relief options, you can work toward resolving your tax issues and regaining financial stability.
The Missouri Supreme Court halted the immediate release Wednesday of a man whose murder conviction was overturned — just as the man was about to walk free.
A St. Louis Circuit Court judge had ordered Christopher Dunn, now 52, to be released by 6 p.m. CDT Wednesday and threatened the prison warden with contempt if Dunn remained imprisoned. But Republican Attorney General Andrew Bailey has been fighting Dunn’s release.
The situation was chaotic as the deadline set by the judge approached. Corrections Department spokesperson Karen Pojmann told The Associated Press that Dunn was out of the prison facility and waiting for a ride. His wife told the AP she was on his way to pick him up. Minutes later, Pojmann corrected herself and said that while Dunn was signing paperwork to be released, the Missouri Supreme Court issued a ruling that put his freedom on hold.
St. Louis Circuit Judge Jason Sengheiser overturned Dunn’s murder conviction Monday, citing evidence of “actual innocence” in the 1990 killing. He ordered Dunn’s immediate release then, but Bailey appealed, and the state Department of Corrections declined to release Dunn.
St. Louis Circuit Attorney Gabe Gore had filed a motion Wednesday urging the judge to immediately order Dunn’s freedom.
“The Attorney General cannot unilaterally decide to ignore this Court’s Order,” Gore wrote.
An attorney for the Department of Corrections told a lawyer in Gore’s office that Bailey advised the agency not to release Dunn until the appeal plays out, according to a court filing. When told it was improper to ignore a court order, the Department of Corrections attorney “responded that the Attorney General’s Office is legal counsel to the DOC and the DOC would be following the advice of counsel.”
Dunn’s attorney, Tricia Rojo Bushnell, the executive director of the Midwest Innocence Project, expressed her frustration.
“What is this bringing to taxpayers in Missouri? What is this use of our resources and our state’s time getting us?” she said. “All it’s doing is keeping innocent people in prison.”
Dunn’s wife said while driving to the prison that they were numb when he didn’t get out earlier this week.
“If you know a little about the story, you know we’ve had a lot of disappointments where we thought we’d finally get his freedom and it was snatched away,” Kira Dunn said. “So we were just bracing ourselves.”
Dunn’s situation is similar to what happened to Sandra Hemme.
The 64-year-old woman spent 43 years in prison for the fatal stabbing of a woman in St. Joseph in 1980. A judge on June 14 cited evidence of “actual innocence” and overturned her conviction. She had been the longest held wrongly incarcerated woman known in the U.S., according to the National Innocence Project, which worked to free Hemme.
Appeals by Bailey — all the way up to the Missouri Supreme Court — kept Hemme imprisoned at the Chillicothe Correctional Center. During a court hearing Friday, Judge Ryan Horsman said that if Hemme wasn’t released within hours, Bailey himself would have to appear in court with contempt of court on the table. Hemme was released later that day.
The judge also scolded Bailey’s office for calling the warden and telling prison officials not to release Hemme after he ordered her to be freed on her own recognizance.
Dunn, who is Black, was 18 in 1990 when 15-year-old Ricco Rogers was killed. Among the key evidence used to convict him of first-degree murder was testimony from two boys who were at the scene of the shooting. Both later recanted their testimony, saying they had been coerced by police and prosecutors.
At an evidentiary hearing in 2020, another judge agreed that a jury would likely find Dunn not guilty based on new evidence. But that judge, William Hickle, declined to exonerate Dunn, citing a 2016 Missouri Supreme Court ruling that only death row inmates — not those like Dunn sentenced to life in prison without the possibility of parole — could make a “freestanding” claim of actual innocence.
A 2021 law now allows prosecutors to seek court hearings in cases with new evidence of a wrongful conviction.
Although Bailey’s office is not required to oppose such efforts, lawyers for his office said at the hearing that initial testimony from two boys at the scene who identified Dunn as the shooter was correct, even though they recanted as adults.
He also raised opposition at a hearing for Lamar Johnson, who spent 28 years in prison for murder. Another St. Louis judge ruled in February 2023 that Johnson was wrongfully convicted, and he was freed.
Another hearing begins Aug. 21 for death row inmate Marcellus Williams. Bailey’s office is opposing the challenge to Williams’ conviction, too. Timing is of the essence: Williams is scheduled to be executed Sept. 24.
Steven Puro, professor emeritus of political science at St. Louis University, said Bailey is in a highly competitive race for the attorney general position with the primary quickly approaching on Aug. 6.
“Bailey is trying to show that he is, quote, ‘tough on crime,’ which is a very important Republican conservative position,” he said. “Clearly, he’s angering members of the judicial system that he will have to argue before in the future. But he’s making the strategic notion that he needs to get his name before the voters and try to use that to win the primary election.”
Michael Wolff, a former Missouri Supreme Court judge and chief justice, agreed, saying it seems this has become political for Bailey.
“But one of the things is that no matter what your beliefs are, if a court orders something to happen, it’s not your purview to say no,” he said. “The court has to be obeyed.”
The U.S. military intercepted several Russian and Chinese bombers in international airspace near the coast of Alaska Wednesday.
Two Russian Tu-95s and two Chinese H-6s entered what is known as the Alaska Air Defense Identification Zone, North American Aerospace Defense Command said in a statement Wednesday night.
The aircraft were “detected, tracked and intercepted,” NORAD said. They remained in the Alaska ADIZ and did not enter U.S. airspace.
The bombers were intercepted by U.S. F-16 and F-35 fighter jets, along with Canadian CF-18s and other support aircraft, a U.S. defense official confirmed to CBS News.
The official said that this marks the first time ever that Russian and Chinese aircraft have jointly entered the Alaska ADIZ, and the first time Chinese H-6s have encroached off Alaska.
While the Alaska ADIZ is considered part of international airspace, it is defined as an area where sovereign U.S. airspace ends but “that requires the ready identification of all aircraft in the interest of national security,” according to NORAD.
The activity from the Russian and Chinese bombers was “not seen as a threat,” NORAD noted.
Sefa Karacan/Anadolu Agency via Getty Images
In February, the U.S. detected four Russian warplanes flying in the Alaska ADIZ, as was another Russian military aircraft in May 2023.
And in February 2023, Russian warplanes were intercepted there twice in one week. And that same month, a Chinese spy balloon was detected near Alaska before eventually making its way across the continental U.S. and being shot down off the coast of South Carolina.
— Eleanor Watson contributed to this report.
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