How Long Does It Take to Pay Off IRS Tax Debt?

Clip art of dollar bills, coins, and a stack of papers marked "debt"Owing money to the IRS can be overwhelmingly stressful and if you don’t know how to navigate through a negotiation with the IRS, you could potentially dig yourself into a deeper financial hole.

There are several factors that will influence how long it takes to pay off your tax debt, such as the amount of your balance, how old the tax debt is, and your overall financial situation.

In some cases, you may be able to settle your tax debt relatively quickly if you have low income and few assets. For more complex situations, you may need to contact an experienced IRS tax attorney to protect your rights and ensure that you walk away from the IRS debt-free.

How much do you owe?

The IRS generally wants the money that is owed to them as soon as possible. However, there is always room for compromise in the world of taxes. Fortunately, the IRS offers flexible payment arrangements to allow taxpayers to pay back taxes without breaking their budget.

Available payment programs are not a one-size fits all arrangement, there are many variables that can categorize you within specific brackets that can determine your payment eligibility.

If you owe under $10,000, you can qualify for a guaranteed installment agreement provided that you can pay off your balance within three years.

If you owe up to $50,000, you can typically pay off your balance over the course of 72 months with a streamlined installment plan by paying with direct debit. Taxpayers who owe $25,000 or less may be eligible for streamlined agreements using other payment methods.

If you owe over $50,000 or the monthly payments under a streamlined agreement are too high for you, you’ll need to provide detailed financial information to the IRS to negotiate a plan that fits your budget.

Collections Statute of Limitations

Any type of tax debt forces you into the realm of the IRS for a specified timeline. Typically, the IRS has ten years to collect outstanding taxes. Ten years seems like a long time, but don’t procrastinate on re-payment because if your collections expiration date is approaching, the IRS may expect you to pay more each month to maximize the amount they can collect.

However, the IRS can be flexible when approached correctly. There have been cases where the IRS has forgiven portions of debt that were approaching the expiration date through methods such as partial payment installment agreements. It is highly recommended that you contact an experienced tax lawyer to help you determine if you qualify for this type of treatment.

Your Financial Situation

Everyone’s financial situation is different and unique to them, and the IRS understands this. If you are unable to pay off your tax debt in full, you may qualify for an Offer in Compromise. These requests generally take a while to process, but your debt can be forgiven quickly if your submission is accepted, with a maximum repayment term of 24 months.

Other factors can also impact how long it takes to pay off your tax debt. You may be able to get some tax relief using penalty abatement or innocent spouse relief, which can allow you to pay off the remaining balance more quickly.

Contact an Attorney

Your tax attorney can evaluate your case to determine the most efficient way to resolve your tax debt.

Ayar Law provides creative solutions to your tax problems, including Offers in Compromise and penalty abatement. Call us at 800.571.7175 to get free, no-obligation tax advice from one of our highly skilled, experienced IRS tax attorneys.

Venar Ayar, Esq.

Venar Ayar, Esq.

Attorney-at-Law, Master of Laws in Taxation
Principal and founder, Ayar Law

Venar is an award-winning tax attorney ranked as a Top Lawyer in the field of Tax Law. Mr. Ayar has a Master of Laws in Taxation – the highest degree available in tax, held by only a small number of the country’s attorneys.