Installment Agreement

• The most common IRS repayment plan is an installment agreement. The plan allows taxpayers to repay tax debt over time, and the plan is relatively simple to set up. Once you are on a formal payment plan, the IRS can't take additional collection measures against you, such as bank levies and accounts receivable garnishments. Be aware that tax liens may be filed in conjunction with the establishment of a payment plan, and you must make all payments and file future returns on time to remain current on the agreement. Regular IRS payment plans are designed to allow you 60 months to pay your bill. To determine how much your minimum payment will be on this plan, divide your total balance by 60.
  
  

Partial Payment Installment Agreement

• If your disposable monthly income is not enough to support the monthly payments of a regular IRS payment plan, you might qualify for a partial payment plan. This plan allows you to make payments in the amount you can afford until the IRS collection period expires. The IRS has ten years from the date you accrue a tax balance to collect the amount you owe. Taxpayers who use the partial payment option may make small payments for several years but usually do not pay the full balance before the IRS loses the ability to collect further payments. Be prepared to provide a financial disclosure statement and documents to support your income and expenses when you request this plan.
  
  

Offer in Compromise

• If both you and your business have little disposable monthly income and limited equity in assets, you may qualify for an offer in compromise (OIC). The OIC program is the IRS settlement package that allows you to pay only a portion of what you owe. The IRS uses specific calculations and eligibility criteria when processing applications for the program. Review the IRS qualifying criteria prior to applying to ensure you meet the requirements.
  
  

Full Payment

• The quickest way to resolve your federal payroll tax liability is to fully pay the amount. If you don't have the cash available to pay the balance, consider the equity you have in assets. For example, if you have enough equity in your home to full pay your taxes, you might be able to refinance and use the proceeds to pay the bill. In addition, consider other personal or business assets you own that can be sold, such as vehicles, tools or equipment. Only sell assets that you do not need and whose sale proceeds will satisfy your debt.