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What to Do If You Owe the IRS $50,000 or More

What to Do If You Owe the IRS $50,000 or More

Owing over $50,000 in tax debt can result in IRS tax liens and levies. Your tax debt can make it hard to meet your other expenses, and you may be worried about all the IRS notices you’ve been receiving.

Fortunately, you still have many tax resolution options if you owe the IRS $50,000 or more. But if you don’t do anything to fix your tax problems, expect the IRS do use their vast collection powers against you.

IRS Passport Actions

The IRS can certify to your seriously delinquent tax debt to the State Department if you owe over $51,000 (indexed yearly for inflation). Your passport can then be revoked or denied the next time you need a passport renewal.

Tax debt is seriously delinquent if a levy has been issued (such as a bank account levy) or if a Notice of Federal Tax Lien has been filed and you failed to request a Collection Due Process (CDP) hearing or your CDP rights have been exhausted.

Your options for getting your passport back become more limited once your debt has been certified as seriously delinquent. You are much better off negotiating with the IRS before certification occurs.

Streamlined Installment Agreements

You may be able to get some of the benefits of streamlined installment agreements if you can get your balance under $50,000. A Collection Information Statement may be required if you’ve had a prior payment plan default, but otherwise it may not be necessary. 

You could also avoid a determination of whether to file a Notice of Federal Tax Lien, but only if you pay by direct debit or payroll deduction. You may be able to pay back your balance over the course of 72 months or the remainder of the collections period, whichever period is shorter.

If a Notice of Federal Tax Lien has already been filed, you won’t be able to request a lien withdrawal until your balance is below $25,000 and other requirements are met.

If you don’t qualify for streamlined processing, you’ll need to submit the Collection Information Statement to negotiate a customized installment agreement. The IRS will base your required monthly payments on your income and expenses, which could result in a higher required monthly payment amount.

Avoid the problems that come with owing over $50,000 to the IRS—such as the filing of a Notice of Federal Tax Lien, IRS levies, and passport revocations—by consulting with a tax resolution attorney.

Prevent IRS collection actions by calling The Gartzman Law Firm at 770-939-7710. We can help stop bank account levies and wage garnishments before they happen and find a creative solution to your tax problems.