Many people who owe back taxes don’t have the necessary funds to pay their debt in full at one time. Fortunately, the Internal Revenue Service (IRS) will typically agree to let you pay your tax debt in installments over a period of time. The installment agreement should be reasonable based on your financial situation, however, there may come a time when you’re unable to make a payment or otherwise fail to send payment.
What Happens When You Fall Behind on Your Tax Installment Agreement?
If you fail to make a payment on your tax installment agreement, the IRS will send you a letter called the CP523 notice. This will include the following pieces of information:
- That the IRS intends to terminate your installment agreement due to default
- The amount owed to prevent termination including penalties and interest
- The date by which you must pay that amount to avoid termination
- Contact information for the IRS
What You Should Do
As soon as you realize you missed a payment for your installment agreement, make the payment to avoid termination. Contact the IRS if you feel that you may be at risk for the cancelation of your installment agreement. If you are temporarily not able to pay, alert the IRS of your financial situation. They may offer a solution, including temporary amnesty or a reduced payment.
If you don’t respond to the CP523 notice, you can face significant penalties and interest, and the IRS may soon levy your bank accounts or your wages to obtain the money owed.
Find Out How Paramount Tax Relief in Sacramento Can Help You
It’s important to never ignore a notice from the IRS. If you struggle with your tax debt, reach out to Paramount Tax Relief. Our tax professionals will review your situation and discuss the best options for you.
If you’re still not convinced to choose our tax relief company in Sacramento, read the testimonials from some of our satisfied clients!