Who this is for
- US businesses that owe federal tax after filing late or back returns
- S corporations, C corporations, partnerships and LLCs that cannot pay a federal balance at once
- Owners who received a lien or levy notice for a business debt
Not covered here
- Filing the missing business returns first
- Removing late-filing and late-payment penalties
- Personal liability for unpaid payroll tax
- State tax debt, which has its own agency, plans and liens
- Canadian payment arrangements
What are the IRS payment options when a business owes more than it can pay?
The options run from least to most paperwork: pay in full, a short-term plan, a simple monthly plan (an installment agreement), a larger plan with a financial statement, an offer in compromise, and a delay in collection. The right one depends on the size and type of the balance and on what the business can pay after its running costs (IRS: payment plans; IRS: Topic no. 202).
| Option | Fits when | Key point |
|---|---|---|
| Pay in full | Cash, a loan or an asset sale covers the balance | Stops interest and penalties |
| Short-term plan | The balance can be paid within 180 days | A business must call. No setup fee. |
| Simple payment plan (installment agreement) | The balance is within the simple-plan limits below | Monthly payments, no financial statement |
| Larger or partial payment plan | The balance is above those limits, or cannot be paid in full within the collection period | The IRS may ask for Form 433-B; a partial plan requires it and is reviewed every two years |
| Offer in compromise | The business cannot pay in full by any plan or from its assets | Settles for less, on strict conditions |
| Delay in collection | The business cannot pay anything now | The debt keeps growing and a lien can still be filed |
A case needs more than a simple call when the balance is above the limit that applies to it (lower if it includes payroll tax), when the payroll part may reach owners personally, when a lien or levy notice has arrived, or when any return is missing. After a batch of back returns, three questions decide the next step: which plan fits the size and type of debt, what financial statement the IRS will ask for, and who makes the call. A notice also starts a short clock: 30 days to ask for a hearing, and with a revenue officer as few as 3 business days after a manager conference to stop collection from resuming (see the appeals table below). Gather before the first call:
- Filed returns and every IRS notice.
- The balance by tax year and type of tax.
- Recent business bank statements, and a list of assets and debts.
- A recent profit and loss statement and balance sheet; the financial statement asks for monthly averages over 3, 6, 9 or 12 months.
- Payroll returns and proof of recent tax deposits.
What must be true before the IRS agrees to a business payment plan?
The business must have filed every required return (IRS: Publication 594) and be current on its filing and payment requirements (IRS: Topic no. 202). The IRS checks this before it grants an agreement (IRS: Internal Revenue Manual 5.14.5).
- Returns: every required return, such as income tax and payroll returns. For missing years, start with catching up on unfiled business returns, which also covers how many past years the IRS asks for. With no books, rebuilding books from bank statements comes first.
- Current taxes: federal tax deposits and, where they apply, estimated tax payments, such as for a C corporation (IRS: Internal Revenue Manual 5.14.5).
- Owners' own returns: for plans that need a financial statement, IRS policy is to check that officers, partners and LLC members have filed their own returns (IRS: Internal Revenue Manual 5.14.7). See unfiled personal returns.
These conditions continue during the plan. To avoid default, the business makes every payment, files every return on time and pays new taxes in full and on time (IRS: payment plans).
How does a business apply, and when does the owner apply instead?
The IRS says business accounts cannot apply online: a business calls the number on its IRS notice or 800-829-4933 (7 a.m. to 7 p.m. local time), or visits a local Taxpayer Assistance Center (IRS: online payment agreement; IRS: payment plans). Publication 594 and the Form 941 instructions do describe an online plan for a payroll balance of $25,000 or less (the instructions add: payable within 24 months), but only the phone route is listed for businesses (IRS: Publication 594; IRS: Instructions for Form 941). For account questions from outside the US, the IRS lists 267-941-1000 (not toll-free), Monday to Friday, 6 a.m. to 11 p.m. Eastern (IRS: contact my local office internationally). Form 9465 is an individual's form; a business still operating with payroll tax calls instead (IRS: Instructions for Form 9465).
Whose debt it is decides who asks:
| Who owes | The debt sits with | Ask as |
|---|---|---|
| Sole proprietor, or owner of a one-member LLC | The owner for income tax. A sole proprietor also owes payroll tax personally; a one-member LLC itself owes its payroll tax (IRS: Internal Revenue Manual 5.16.1; IRS: Internal Revenue Manual 5.14.7). | Income tax: an individual, online if within the individual limit (IRS: payment plans). Payroll tax: a business, by phone. |
| Partnership or multi-member LLC | Partners, for their shares of income tax (IRS: Partnerships). The partnership, for payroll tax, late-filing penalties (IRS: failure to file penalty) and tax the IRS assesses on the partnership after an exam, called an imputed underpayment (26 U.S.C. 6225). General partners are generally personally liable for the partnership's tax debt (IRS: Internal Revenue Manual 5.16.1). | Each owner as an individual; the partnership by phone |
| S corporation | Shareholders, for income passed through. The corporation, for payroll tax and some entity-level tax (IRS: S corporations). | Each shareholder as an individual; the corporation by phone |
| C corporation | The corporation, for its income tax and payroll tax | The corporation, by phone |
If a revenue officer (an IRS collection employee) is assigned, the plan is worked out with that officer. A representative needs a signed Form 2848 to call for the business. Voluntary payments while a mailed request is pending reduce the penalties and interest that build up (IRS: Publication 594).
How big a balance qualifies for a simple payment plan?
A business with payroll tax in the balance generally qualifies at $25,000 or less in assessed tax, penalties and interest. A business without payroll trust fund tax generally qualifies at $50,000 or less. A sole proprietorship that is no longer operating gets that higher limit even with payroll tax. The business proposes the monthly amount, and the payments must clear the balance within the collection period, the time the IRS has to collect, generally 10 years from assessment (IRS: Topic no. 202). Assessed means the IRS has put the balance on its books (IRS: understanding a federal tax lien).
| Balance | Simple plan limit |
|---|---|
| Business with payroll (trust fund) tax | $25,000 |
| Business without trust fund tax | $50,000 |
| Individual income tax, including a sole proprietor's | $50,000 |
An individual, including a sole proprietor, who can pay within 180 days can also apply online for a short-term plan with a balance under $100,000 (IRS: online payment agreement).
Trust fund tax is the income tax and Social Security and Medicare tax withheld from employees' pay (IRS: Publication 594). A payroll balance counts as "without trust fund tax" only when the withheld part is fully paid and only the employer share, penalties or interest remain (IRS: Internal Revenue Manual 5.14.5).
The Internal Revenue Manual guides IRS staff and can change. It adds these working rules for revenue officers (IRS: Internal Revenue Manual 5.14.5):
- The simple-plan limit counts assessed tax, penalties and interest plus tax not yet assessed, such as on a return just filed. Accrued but unassessed penalties and interest are not counted.
- A business can pay the balance down before the plan starts to get under the limit. For a payroll balance, the first installment cannot do this.
- A payroll simple plan is not available when the request comes with a request to release a levy or appears aimed only at delay. Earlier defaulted plans draw extra review.
- Within the limits, no financial statement and no lien decision is required, though a revenue officer may still file a lien.
For payroll tax, the IRS also looks at whether owners or others who ran the money can be personally liable for the withheld part (26 U.S.C. 6672). The usual limit to assess is 3 years from April 15 of the following year, or from the filing date if later, so filing a late payroll return starts that clock; an unfiled return leaves it open (IRS: Internal Revenue Manual 5.7.3). A voluntary pay-down goes to the employer share first unless it is designated in writing, when paid, to the withheld tax of a named period (IRS: Internal Revenue Manual 5.7.4). See the trust fund recovery penalty guide and missed payroll tax deposits.
What if the balance is above the simple limits: when does the IRS ask for Form 433-B?
Above the simple limits the IRS may ask for Form 433-B, and a partial payment plan requires it (IRS: Topic no. 202). It is a financial statement signed under penalties of perjury by an officer, partner or LLC member.
| Part of Form 433-B | What it asks |
|---|---|
| Business and people | Entity type, payroll size, deposit schedule, and each owner and officer with ownership share, pay and whether that person is responsible for depositing payroll taxes |
| Other financial information | Lawsuits, past bankruptcy, amounts related parties owe the business, affiliates, expected income changes, and any asset moved out of the business for less than full value in the last 10 years |
| Assets and debts | Cash, bank accounts, receivables, investments, digital assets, available credit, property, vehicles, equipment and business liabilities |
| Monthly income and expenses | Averages over a recent 3, 6, 9 or 12 months, on a cash or accrual basis |
The IRS may then ask for proof: filed returns, profit and loss statements, bank, investment and loan statements, and bills for recurring costs (IRS: Form 433-B). Books that are months behind make the form hard to complete accurately.
The transfer question matters beyond the form: a person who received an asset for less than full value can be held liable as a transferee for the business's income tax, and for its other taxes after a liquidation or reorganization, generally assessed within 1 year after the time to assess the business ends (26 U.S.C. 6901).
For a plan above the simple limits, the manual says the IRS tests whether the business can pay its running costs, current taxes and the back tax. A business that can pay in full from assets or income is asked to do so, and may be asked to sell assets or borrow against equity first (IRS: Internal Revenue Manual 5.14.7; IRS: Internal Revenue Manual 5.14.5).
What do setup fees, penalties and interest cost during a plan?
A plan adds a setup fee, and interest and some penalties keep running until the balance is paid. By phone or mail, a short-term plan has no setup fee, a long-term plan paid by direct debit costs $107, and one paid another way costs $178. Reduced fees for low-income taxpayers apply only to individuals, and the fee may be taken from the first payments (IRS: payment plans; IRS: Publication 594).
- Failure-to-pay penalty: 0.5% of the unpaid tax for each month or part of a month, up to 25%. If the tax is still unpaid 10 days after a notice of intent to levy, the rate becomes 1% a month.
- The reduced plan rate rarely reaches a business. The rate falls to 0.25% a month during a plan only for an individual who filed on time. A corporation or partnership stays at 0.5% (IRS: failure to pay penalty).
- Interest: charged daily on unpaid tax, penalties and earlier interest, at a rate reset quarterly. It generally comes down only when the tax or penalty it was charged on is reduced, or for unreasonable IRS error or delay (IRS: interest).
- Refunds: the IRS applies future refunds to the balance until it is paid. Every scheduled payment is still due when it does (IRS: payment plans).
- A missed payment: a plan that goes into default can cost a reinstatement fee. The IRS tells a taxpayer who gets a notice of intent to terminate the plan to contact it immediately (IRS: payment plans).
To challenge a penalty, see late-filing and payment penalties.
What is a federal tax lien, and when does the IRS file one?
A federal tax lien is the government's legal claim against all of a taxpayer's property, including property acquired later. It arises once the IRS assesses the tax, sends a bill and the business does not pay in full (IRS: understanding a federal tax lien).
The Notice of Federal Tax Lien is the public filing, made with county or state offices, that tells other creditors the IRS has a claim and fixes its place in line (IRS: Publication 594).
- Reach: all business property and rights to it, including accounts receivable.
- Effect: the notice is public and can limit the business's ability to get credit.
- Timing: the IRS may file at any time (IRS: Form 656-B). Staff guidance says a notice is generally not filed when the assessed balance is under $10,000, though it may be to protect the government's interest (IRS: Internal Revenue Manual 5.12.2). For a partial payment plan, the IRS must decide whether to file.
- Not a seizure: a lien secures the claim. A levy takes the property.
How do I get an IRS tax lien removed: released, withdrawn or moved behind a loan?
Paying in full is the cleanest route: the IRS releases the lien within 30 days after payment. The other routes change the lien's effect without erasing the debt (IRS: understanding a federal tax lien).
| Route | What it does | When it fits |
|---|---|---|
| Release | Clears the lien and the public notice | Debt paid in full, an accepted offer fully paid, a bond, or the collection period ended |
| Withdrawal | Removes the public notice; the debt remains | Form 12277. A plan is in place, it helps pay faster, the IRS skipped a procedure, or both sides benefit |
| Withdrawal, direct-debit route | Same, for a direct debit plan | Balance $25,000 or less, paid in full within 60 months or before the collection period ends, three consecutive payments, no earlier default, full compliance |
| Withdrawal after release | Removes the notice once the debt is paid | Three years of compliance on returns and deposits |
| Subordination | Lets another lender go first; the lien stays | Refinancing or borrowing against property |
| Discharge | Frees one property from the lien | Selling a specific asset |
The direct-debit route is open to individuals, to businesses whose debt is income tax only, and to businesses that are out of business. A business still operating with payroll tax in the balance is outside it. Above $25,000, a taxpayer may pay the balance down first (IRS: understanding a federal tax lien; IRS: Publication 594).
An accepted offer in compromise does not release the lien until the offer is paid in full (IRS: offer in compromise). To verify a lien or get a payoff figure, call the IRS Centralized Lien Operation at 800-913-6050 (IRS: understanding a federal tax lien). A denied withdrawal, discharge or subordination can be appealed.
Can the IRS levy my business bank account, and what pauses collection?
Yes. A levy is a seizure of property or rights to property, such as a bank account, wages or other payments held by someone else, equipment or real estate; the law limits seizure of some business assets.
The IRS usually levies only after it assesses and bills the tax and sends a Final Notice of Intent to Levy and Notice of Your Right to a Hearing at least 30 days earlier. A bank holds levied funds for 21 days before sending them. A bank, customer or other holder served with a levy must turn over what it holds or owes the business, and is personally liable for that amount if it does not (26 U.S.C. 6332). The 30-day notice can be skipped in a few cases, such as when collection of the tax is in jeopardy, or for an employment tax levy within two years of an earlier hearing request on employment tax for other periods (IRS: Publication 594).
New levies are generally barred while a plan request or offer is pending, while a plan is in effect, for 30 days after a rejection, while Appeals considers an appeal, and during a timely hearing on a levy notice. During a hearing on a lien notice the IRS normally holds off, but the law does not bar a levy (IRS: payment plans; IRS: Topic no. 202; IRS: Publication 1660).
The collection clock is suspended while a plan request or an offer is pending, but not while an approved plan is in effect, so the 10 years keeps running during a plan (IRS: Topic no. 202; IRS: offer in compromise). The IRS must release a levy if the debt is paid or the collection period ended, if release will help the business pay, if a plan's terms do not allow the levy to continue, or if the property is worth more than the debt and release will not hinder collection. For an individual such as a sole proprietor, a levy that prevents paying basic living expenses is also a ground (IRS: Publication 594; 26 U.S.C. 6343; Treasury Regulation 301.6343-1).
How do I appeal a rejected plan, a lien notice or a levy notice?
Each action has its own appeal route and its own clock, and missing the clock can end the right to go to court (IRS: Publication 1660; IRS: Publication 594).
| What happened | Appeal route | Clock |
|---|---|---|
| Notice of Federal Tax Lien filed | Collection Due Process hearing with the IRS Independent Office of Appeals, Form 12153 | The IRS notifies you within 5 business days of filing; request by the date on that notice, 30 days after the 5-day period |
| Final Notice of Intent to Levy | Collection Due Process hearing, Form 12153 | By the 30th day after the date of the letter |
| Plan rejected | Collection Appeals Program: call the number on the letter, or send Form 9423 (in writing if a revenue officer sent the letter) | By the 30th day after the date of the rejection letter |
| Plan changed or ended | Collection Appeals Program, as for a rejection | 30 days from the date of the notice; after a termination takes effect, 30 more days |
| Lien or levy action by a revenue officer | Collection Appeals Program: a conference with the officer's manager first, then Form 9423 | Tell the officer within 2 business days after the conference and postmark Form 9423 within 3 business days, or collection resumes |
| Lien withdrawal, discharge or subordination denied | Collection Appeals Program | The time shown in the denial |
| Offer rejected | Written request to the Independent Office of Appeals | 30 days from the rejection notice (IRS: Form 656-B) |
An offer the IRS returns, for example for a missed payment or an unfiled return, has no appeal (IRS: Form 656-B).
A timely Collection Due Process request generally stops a levy on that tax and period during the hearing, and a disagreement with the result can go to the Tax Court within 30 days of the determination (IRS: Publication 594). A late request can still get an equivalent hearing, with no court review, within one year of the levy notice date or one year plus 5 business days after the lien filing date. The Collection Appeals Program is faster and covers more actions, but its result cannot go to court. A collection alternative, such as a plan or an offer, can be raised during the hearing (IRS: Publication 1660).
When does an offer in compromise make sense for a business?
An offer in compromise settles a tax debt for less than the full amount, but the IRS generally will not accept one when the business can pay in full through a plan or its asset equity, and says to explore other payment options before applying (IRS: offer in compromise).
Before the IRS considers a business offer, all of these must be true (IRS: Form 656-B):
- All required returns are filed, and the business has a bill for a debt in the offer.
- Required estimated tax payments for the current year are made.
- A business with employees has made its federal tax deposits for the current quarter and the two before it.
- The business is not in an open bankruptcy.
- If the debt includes trust fund tax, that part is paid or the IRS has decided the trust fund recovery penalty for every possible responsible person.
A corporation, partnership or LLC submits Form 433-B (OIC) with Form 656. Each Form 656 carries a $205 fee. A lump-sum offer pays 20% with the application and the rest in five or fewer payments; a periodic offer starts payments with the application. The low-income fee waiver is for individuals only (IRS: offer in compromise).
Penalties and interest continue while the offer is pending. The IRS may file a lien and does not release it until the offer is paid in full. If the offer is rejected, the fee is not returned and payments are applied to the balance (IRS: offer in compromise). After acceptance, the business must stay current on filing and payment through the fifth year or the IRS can default the offer (IRS: Form 656-B). The IRS publishes an Offer in Compromise Pre-Qualifier tool to check the basic conditions (IRS: offer in compromise).
What if the business cannot pay anything now?
The IRS can delay collection and mark the account "currently not collectible" until finances improve. The debt stays: interest and penalties continue, and a lien can still be filed (IRS: Topic no. 202).
The manual limits the hardship version of this status, which rests on basic living expenses, to individuals, sole proprietorships, partnerships with a personally liable general partner, and LLCs whose owner is the liable taxpayer. An operating corporation, or an LLC that is itself the liable taxpayer, qualifies only when it can pay its current taxes but has no receivables, receipts or asset equity the IRS can reach (IRS: Internal Revenue Manual 5.16.1).
Who can speak to the IRS for the business: a CPA, an attorney or an owner?
In collection and before the Independent Office of Appeals, a business can be represented by an attorney, a certified public accountant, an enrolled agent, or its own full-time employees, general partners or bona fide officers. A representative who calls or receives confidential information needs a signed Form 2848 (IRS: Publication 594; IRS: Publication 1660).
The IRS does not rank these. A financial statement signed under penalties of perjury, a lien that affects a loan, or a payroll balance each call for decisions on which plan to propose and what to appeal. How a CPA, an enrolled agent and an attorney differ, including confidentiality, is in CPA, enrolled agent or tax software; how a representative handles an IRS letter is in what the IRS letter means.
Example
These examples are illustrative. All amounts are US dollars. Each balance is assessed tax, penalties and interest combined.
S corporation with two years of payroll tax
An S corporation files its back payroll returns, and its deposits are now current. It owes US$8,000 for Year 1 and US$10,000 for Year 2, US$18,000 in all, and the balance includes withheld tax. The limit counts the whole balance, not each year. US$18,000 is inside the $25,000 limit for payroll tax, so the corporation would fall in the simple-plan range and could ask by phone with no financial statement. At US$30,000 the balance would be over the limit, and the IRS may ask for Form 433-B. Personal liability questions for the people who ran the withheld tax can still arise.
Partnership LLC owner with a share of back tax
A two-owner LLC taxed as a partnership files two late returns. The partnership owes no income tax of its own. One owner's share of back tax, with penalties and interest, is US$15,000 for Year 1 and US$25,000 for Year 2 on the owner's personal return, US$40,000 in all. That share is the owner's personal debt, so it would fall under the individual route, which the IRS offers online up to $50,000 for a long-term plan once all required returns are filed. Had the combined total passed that limit, the owner could no longer use the online long-term plan. The partnership's own late-filing penalty is a separate balance, handled by phone; small-partnership penalty relief may apply.
C corporation owing about US$120,000 after four late returns, with a lien notice
A C corporation files four late returns. Its balance with penalties and interest is US$30,000 for each year, US$120,000 in all, and a lien notice has arrived. The balance is above both simple limits, so the IRS may ask for Form 433-B. The IRS first tests whether the corporation can pay in full from assets or borrowing. Any larger plan is generally sized to what it can pay after operating costs and current taxes, and the corporation decides by the date on the notice whether to request a Collection Due Process hearing. If the debt is income tax only, it may later ask to withdraw the public lien notice after paying the balance down to $25,000 and making three direct debit payments on a plan that clears the rest within 60 months.
Different for you?
- You just filed back returns and the balance is more than the business can pay, or a lien or levy notice has arrived: this can mean a financial statement and a choice among plans. Read what the IRS letter means; for plan choice and Form 433-B, see business tax help.
- Payroll tax is part of the balance: owners or others who ran the money can be personally liable. See missed payroll tax deposits and the trust fund recovery penalty.
- Returns are still missing, or there are no books: the IRS checks that required returns are filed before it grants a plan. Start with catching up on unfiled business returns, then rebuild the books with bookkeeping help.
- Most of the balance is penalties: see late-filing and payment penalties.
- You are a sole proprietor or general partner, or your own personal returns are unfiled: the business's payroll tax is generally already your own debt, so see missed payroll tax deposits; for your own returns, see catching up on unfiled personal returns.
- The owner or the business is outside the US: see cross-border tax help.
- The debt is to the Canada Revenue Agency: see the CRA payment arrangement guide.
- The debt is state tax: an IRS plan covers federal tax only. A state tax agency sets its own plans and liens.
Figures on this page
| Figure | Value | Source |
|---|---|---|
| Simple payment plan limit for a business with trust fund tax Maximum assessed tax, penalties, and interest for most such businesses; out-of-business sole proprietors may have a higher limit | $25,000 | IRS: Topic no. 202, Tax payment options Checked |
| Simple payment plan limit for a business without trust fund tax Assessed tax, penalties and interest; the payments must pay the balance in full by the collection statute expiration date, generally 10 years from assessment. Also the limit for an out-of-business sole proprietorship with trust fund tax | $50,000 | IRS: Topic no. 202, Tax payment options Checked |
| Short-term IRS payment plan length Businesses must call to request a short-term plan | 180 days | IRS: Topic no. 202, Tax payment options Checked |
| Online Form 941 installment agreement repayment period Must be able to pay in full within this period and owe no more than the stated online limit | 24 months | IRS: Instructions for Form 941 Checked |
| General IRS collection period after assessment Internal Revenue Code section 6502; statutory suspension and extension rules may change the end date | 10 years | US Code: section 6502 Checked |
| Individual online simple installment plan balance limit Combined tax, penalties and interest may equal this amount; all required returns must have been filed. | $50,000 | IRS: Online payment agreement application Checked |
| Individual online short-term payment plan balance limit Combined tax, penalties and interest must be less than this amount; short-term repayment is within 180 days. | $100,000 | IRS: Online payment agreement application Checked |
| General trust fund recovery penalty assessment period From the succeeding April 15 for timely employment tax returns, or actual later filing; exceptions apply | 3 years | IRS: Trust fund recovery penalty assessment period Checked |
| Deemed filing date for early employment returns Withholding/FICA assessment generally runs from the later of actual filing or this date; exceptions and extensions apply. | April 15 of the following year | IRS: Trust Fund Recovery Penalty manual Checked |
| IRS long-term payment plan setup fee, direct debit, applied by phone, mail or in person Direct Debit Installment Agreement; waived for low-income taxpayers | $107 | IRS: Payment plans; installment agreements Checked |
| IRS long-term payment plan setup fee, payment methods other than direct debit, applied by phone, mail or in person Low-income taxpayers pay a reduced fee that may be reimbursed | $178 | IRS: Payment plans; installment agreements Checked |
| General monthly failure-to-pay penalty rate Of unpaid tax for each month or part month the tax remains unpaid; special rates can apply in some cases | 0.5% | IRS: Failure to pay penalty Checked |
| General maximum failure-to-pay penalty rate Maximum percentage of unpaid tax | 25% | IRS: Failure to pay penalty Checked |
| Monthly failure-to-pay rate after unpaid levy notice Applies if tax remains unpaid 10 days after a notice of intent to levy | 1% | IRS: Failure to pay penalty Checked |
| Monthly failure-to-pay penalty rate during an approved individual payment plan Applies only if the individual filed the return on time | 0.25% | IRS: Failure to pay penalty Checked |
| Assessed balance below which the IRS generally does not file a Notice of Federal Tax Lien Internal guidance to revenue officers, not a rule: a notice may still be filed to protect the government's interest | $10,000 | IRS: Internal Revenue Manual 5.12.2, Notice of Lien Determinations Checked |
| Balance at or below which a direct debit installment agreement can support withdrawal of a Notice of Federal Tax Lien Qualifying taxpayers are individuals, businesses with income tax liability only, and out-of-business entities with any tax debt. A balance above this amount may be paid down first. Also requires full payment within 60 months or before the collection period ends, three consecutive direct debit payments and no earlier default | $25,000 | IRS: Understanding a federal tax lien Checked |
| IRS offer in compromise application fee Not required for individuals who meet the low-income qualifications; not returned if the offer is rejected | $205 | IRS: Offer in compromise Checked |
| Share of a lump-sum offer in compromise paid with the application If accepted, the rest is paid in five or fewer payments | 20% | IRS: Offer in compromise Checked |
Primary sources
- IRS: Payment plans and installment agreements
- IRS: Online payment agreement application
- IRS: Topic no. 202, Tax payment options
- IRS: Publication 594, The IRS Collection Process
- IRS: Publication 1660, Collection Appeal Rights
- IRS: Understanding a federal tax lien
- IRS: Offer in compromise
- IRS: Form 656-B, Offer in Compromise Booklet
- IRS: Form 433-B, Collection Information Statement for Businesses
- IRS: Internal Revenue Manual 5.14.5, Simple Payment Plans
- IRS: Internal Revenue Manual 5.14.7, BMF Installment Agreements
- IRS: Internal Revenue Manual 5.7.3, Establishing Responsibility and Willfulness for the TFRP
- IRS: Internal Revenue Manual 5.7.4, Investigation and Recommendation of the TFRP
- IRS: Internal Revenue Manual 5.12.2, Notice of Lien Determinations
- IRS: Internal Revenue Manual 5.16.1, Currently Not Collectible
- Treasury Regulation 301.6343-1, Authority to release levy and return property
- IRS: Instructions for Form 941
- US Code: Section 6225, partnership adjustments and imputed underpayment
- US Code: Section 6332, surrender of property subject to levy
- US Code: Section 6343, authority to release levy and return property
- US Code: Section 6672, failure to collect and pay over tax
- US Code: Section 6901, transferred assets
- IRS: Failure to pay penalty
- IRS: Failure to file penalty
- IRS: Interest
- IRS: Partnerships
- IRS: S corporations
- IRS: Instructions for Form 9465
- IRS: Contact my local office internationally
About this guide
Published by Cloud Accounting under standing professional approval. This version has no separately recorded personal review. It explains general rules for the tax year shown. It is not advice for your situation.
Changes
- : First published.