You have many choices if you owe taxes to the IRS. You could owe taxes for yourself personally or you may owe taxes for a small business. Taxes owed by you for a small business are generally known as Trust Fund taxes. The IRS will set up an installment agreement with you depending upon many factors. It is best to contact the IRS and let them know you want to settle your tax responsibliity. Generally, the settlement can be handled in one of two ways; The first is an installment agreement; the second is an Offer in Compromise. An installment agreement is an agreement to pay the full amount of tax over a certain period of time. The amount of the payment and the number of months needed to pay the tax liability will be agreed to by you and the IRS. An Offer in Compromise is an offer made by you stating that you do not have the resources to pay this tax in full; The IRS and you will then agree to a reduced amount. Before the IRS will settle with you, you need to file form 433 for yourself. If there is a business involved, you will have to file one for your business as well. This form lists all of your assets and liabilities. It is with this form that the IRS is able to determine if you can pay the tax. Download the form from the link below. Take a look at it and fill it out. Under certain circumstances I would recommend that you work with a qualified tax professional to help with the negotiations.
This Legal Guide does not constitute legal advice and does not and is not intended to create an attorney-client relationship. The law may vary depending on the state in which you reside. It is intended only to give some direction in which to seek assistance. Circular 230 Disclosure: Pursuant to recently-enacted U.S. Treasury Department Regulations, I am now required to advise you that, unless otherwise expressly indicated, any federal tax advice contained in this communication, including attachments and enclosures, is not intended or written to be used, and may not be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any tax-related matters addressed herein.