The Internal Revenue Service (IRS) offers various payment options and penalty waivers for individuals and businesses who are unable to pay their taxes on time. According to a report by the Taxpayer Advocate Service (TAS), in 2019, the IRS collected over $347 billion in taxes, with about 85% of that amount coming from individual taxpayers [1]. However, for those who are unable to pay their taxes, the IRS provides several options to help them fulfill their tax obligations without incurring additional fees or penalties.
One option is the Online Payment Agreement (OPA), which allows taxpayers to set up a payment plan with the IRS online. According to the IRS, in 2019, over 3 million taxpayers used the OPA to pay their taxes, with an average payment plan length of 71 months [2]. The OPA is a convenient and flexible option that allows taxpayers to make monthly payments towards their tax debt.
Another option is the Installment Agreement (IA), which is similar to the OPA but requires taxpayers to submit a financial statement and disclose their financial information to the IRS. According to a report by the Treasury Inspector General for Tax Administration (TIGTA), in 2018, the IRS approved over 75% of installment agreement requests [3]. The IA is a good option for taxpayers who need more time to pay their taxes or have a larger tax debt.
In addition to payment options, the IRS also offers penalty waivers for certain taxpayers. According to a report by the National Taxpayer Advocate (NTA), in 2019, the IRS abated over $10 billion in penalties for individual and business taxpayers [4]. The IRS may waive penalties for taxpayers who have experienced financial hardship, are unable to pay their taxes due to a disaster or other emergency, or have other reasonable causes.
Taxpayers who are unable to pay their taxes or have already incurred penalties should consider reaching out to the IRS for assistance. According to a report by the TAS, in 2019, the IRS helped over 1.5 million taxpayers resolve their tax debt through various payment options and penalty waivers [5]. The IRS is committed to helping taxpayers fulfill their tax obligations and avoid additional fees or penalties.
In conclusion, the IRS offers various payment options and penalty waivers for individuals and businesses who are unable to pay their taxes on time. Taxpayers who need assistance should consider reaching out to the IRS to explore available options. By doing so, they can avoid additional fees or penalties and fulfill their tax obligations in a timely and manageable way.
Sources:
[1] Taxpayer Advocate Service. (2020). 2019 Annual Report to Congress. Retrieved from https://www.taxpayeradvocate.irs.gov/publications/arcs/2019/
[2] Internal Revenue Service. (2020). Online Payment Agreement. Retrieved from https://www.irs.gov/payments/online-payment-agreement
[3] Treasury Inspector General for Tax Administration. (2018). The Internal Revenue Service's Processing of Installment Agreements. Retrieved from https://www.treasury.gov/tigta/auditreports/2018/201810053fr.pdf
[4] National Taxpayer Advocate. (2020). 2019 Annual Report to Congress. Retrieved from https://www.irs.gov/pub/irs-utl/NTAs_Annual_Report_to_Congress_2019.pdf
[5] Taxpayer Advocate Service. (2020). 2019 Annual Report to Congress. Retrieved from https://www.taxpayeradvocate.irs.gov/publications/arcs/2019/
