Death and taxes II - Electric Boogaloo
February 12, 2010 4:41 PM   Subscribe

Asking for friend, not that it matters, but how do she revise an existing payment plan with the IRS so that she pays more, or perhaps pay the whole thing off (preferably at lower than what she owes)?

I can't find this on their website anywhere, though it may be there. Friend owes a bunch in taxes/interest/penalties and wants to just pay off in a lump sum (as much as she can - and will IRS accept less even though she's in a payment plan?). Experiences and web links with this are helpful. Not looking for info on offer in compromise.
posted by bunny hugger to Work & Money (8 answers total) 3 users marked this as a favorite
Call them. Simple as that.
posted by DieHipsterDie at 5:22 PM on February 12, 2010

posted by jgirl at 5:32 PM on February 12, 2010 [1 favorite]

Err, I had planned to do the same, but I was just planning to send them a big ol' check for the full amount and let them figure it out. I guess I should keep an eye on this thread in case that turns out to have been an unwise plan!
posted by ErikaB at 5:34 PM on February 12, 2010

Several years ago, I had a payment plan with the IRS that I paid off early. We got in some difficulty when they took the next regularly scheduled direct debit out of my account anyhow. Make sure they turn off any direct payment options when you make the early payoff.
posted by anastasiav at 6:01 PM on February 12, 2010

This site is extremely helpful in regards to the inner workings of the IRS, including their debt collection practices.
posted by greenland at 6:11 PM on February 12, 2010

greenland, I was just looking at the site you linked. I think it should be noted, it has a combination of good information and crass generalizations of "government workers". I didn't realize they weren't "self-starters", though.
posted by Red Loop at 7:26 PM on February 12, 2010


1) you can always pay MORE than your agreed payment
2) You owe what you owe. The Service will not accept less than you owe in taxes.
3) you can sometimes, given good facts, negotiate reduction in interest / waiver of penalties.

So if the question is "my remaining balance is X and I can pay X in a lump sum." The answer is the Service will happily take your payment and if you have in fact paid what they think you owe will happily cancel any auto-debit plan they've previously agreed to.

If the question is "I owe X but can pay today a lump sum of [fraction of] X - will they accept that as payment in full?" The answer is No if you are trying to pay less than the tax you owe, possible if you are trying to paying more than the tax you owe but less than the sum of tax plus interest plus penalties.

Best bet for friend - if friend owes more than 10 - 15% of friend's yearly take-home in tax debt is to contact a registered agent, CPA or lawyer who practices before the Service and get some realy advice and help.

Basically, unless you are eating tree bark, living in a cave and unemployable the Service will never take less than the sum of the tax you owe plus some amount of penalty / interest money.

Good Luck
posted by BrooksCooper at 8:14 PM on February 12, 2010

>The Service will not accept less than you owe in taxes.

Well, they often will, but that negotiation would have (should have) taken place when the payment plan was put into place. It is fair to say that the IRS will not likely accept less than what she owes under the payment plan.

But it would not hurt to ask for a modest discount. If she is to pay $10,000 each year for the next ten years, maybe the IRS would be happy to have $85,000 now. Money in hand, etc.
posted by megatherium at 4:45 AM on February 13, 2010

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