The One Form You Need When You Can’t Pay Your Tax Liability

Didn’t have enough taxes withheld during year and your tax preparer just informed you of your additional tax liability.  It happens, but don’t sweat.  There are many payment options for you to choose from when paying your tax liability.  The payment options are:

  1. Withhold more from your income by changing the amount of tax withholding using the Form W-4
  2. Pay your tax liability by Credit/Debit Card through a Third Party (The third-party will charge a convenience fee)
  3. Get a loan to pay your tax bill to avoid the interest and penalties.
  4. Request an offer in compromise with the IRS to pay less than your tax liability.  Under an offer in compromise, the IRS will look at the taxpayer’s circumstances to determine whether they believe you are able to pay the tax liability before they will accept the offer in compromise.

The payment options listed above are some of the ways to pay your tax liability with the IRS; but it’s not the one form you need when you can’t pay your tax liability.  The one form you need when you can’t pay your tax liability is the Form 9465.  Form 9465 is an installment agreement between the taxpayer and the IRS.   You can complete and send in the form 9465 along with a payment of $105 or $52 depending on whether you have the money to pay the tax liability withdrawn directly from your bank account to pay your tax liability.   If you owe less than $50,000, you complete the Form 9465 and send it to the IRS.  If you owe more than $50,000, you can still complete and send in the Form 9465; but, you will also need to complete and send in Form 433F, a collection information statement.

The IRS will respond to you within 30 days to let you know whether they have accepted, denied, or need additional information in regards to the installment agreement.

There are many payment options to choose from when you owe the IRS additional tax liabilities.  However, the one form to remember is the installment agreement Form 9465 because the worst thing you can do is to ignore the IRS and your outstanding tax liabilities.


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