Tax Debt Help When You Owe IRS $10K, $50K, $100K or More

Tax Debt Help When You Owe IRS $10K, $50K, $100K or More

Owing IRS tax debt can be a worrisome experience as the IRS often takes action to recover back taxes from delinquent taxpayers. Depending on the amount of unpaid taxes, the IRS may issue a tax lien, garnish wages, seize bank accounts, or levy other assets.

We will review the specific actions the IRS takes to collect back taxes and your relief options based on your tax debt amount.

What Can the IRS Do to Collect Back Taxes When I Owe More Than $10,000?

Here is a breakdown of IRS collections to expect when you have unpaid taxes from $10,000 to over $100,000. Keep in mind that you will continue to accrue penalties and interest on your tax debt until you pay it off in full.

Owe IRS $10,000

You need not stress too much when you owe the IRS less than $10,000. Since the Fresh Start program started in 2011, the IRS has stopped issuing tax liens for most back taxes less than $10K. However, exceptions happen that could force the IRS to collect your tax debt.

Regardless of the amount you owe the IRS, do not ignore balance due notices or demands for payment from the IRS. If you ignore multiple notices, there’s a chance the IRS will seek a lien or levy.

Owe IRS $10,000+ to $50,000

The IRS takes tax debt over $10K a lot more seriously. The following are specific collection actions to expect when you owe the IRS up to $50K.

If you owe the IRS between $10,000 to $50,000, they will likely issue a tax lien in addition to adding more penalties and interest. An IRS tax lien is a claim to your property to secure your tax debt. With a lien in place, it’s more challenging to sell your property, whether it’s a home or vehicle.

Other IRS collection actions when you owe $10K – $50K in unpaid taxes are wage garnishment to take money directly from your paycheck or a bank account levy to seize what is in your account. Both help the IRS settle your tax debt when you do not pay.

Owe IRS $50,000+ to $100,000

Like what we just covered above, owing the IRS between $50K and $100K will attract tax liens and levies. The IRS may even take and sell property with a lien to offset the tax debt. They will also start automatic payment withdrawals from your bank account or, if employed, garnish your wages.

Owe IRS $100,000 or More

When you owe the IRS more than $100K and aren’t making payments, you’re at most risk to see a tax lien or levy. Just like with other tax debt amounts over $10K, the IRS will levy your bank account and garnish your paychecks or other income (disability payments, retirement funds, Social Security checks).

If you owe the IRS $100,000, you may also lose your passport. If you are considered “seriously delinquent,” you will not have your passport back until you resolve your tax issues.

How Do I Settle Tax Debt When I Owe IRS Over $10,000?

Here is a breakdown of IRS payment plans and tax relief when you owe from $10,000 to over $100,000.

Owe IRS $10,000

If you owe the IRS less than $10,000 in tax debt, contact them to set up a payment plan such as a Guaranteed Installment Agreement. This agreement is a back taxes payment plan that allows you to pay the full amount you owe in installments within 36 months.

Owe IRS $10,000+ to $50,000

If your IRS tax debt is more than $10K and less than $50K, you may qualify for either a short-term payment plan or long-term installment agreement with payments spread over 72 months. Another popular tax resolution option is an Offer in Compromise (OIC) that allows you to resolve your total tax debt for less than what you owe.

Owe IRS $50,000+ to $100,000

If you owe the IRS $50K – $100K, you can request a short-term or long-term payment plan, partial payment installment agreement (PPIA), or an OIC. When you ask for tax relief from the IRS, you will be required to submit Form 433. This collection information statement includes financial details that help the IRS understand your hardship situation, your ability to pay taxes, and how much tax relief you need.

Owe IRS $100,000 or More

If you owe the IRS over $100K in back taxes, consider an OIC or PPIA to settle tax debt. You may also apply for penalty abatement. Since penalties are based on the amount you owe, they will be high when you owe more than $100,000.

First-time or reasonable cause abatement will help reduce penalty amounts. There’s also innocent spouse relief when it is your partner’s tax debt. You can always appeal or dispute unpaid taxes too, usually through a Collection Due Process (CDP) hearing.

Apart from paying additional fees and penalties, failure to pay taxes has consequences that threaten both your money (paychecks and bank accounts) and property (home and vehicles). Generally, IRS collection actions and your options to settle tax debt depend on how much you owe.

Need more help? You can start online by answering 6 simple questions. We never charge for ‘investigations’ or consultations. You can also call us at 866-568-4593.

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