Be sure to file your federal income tax return even if you don't have enough money on hand to pay all or part of what is due. There are financial penalties due for both not filing and not paying.
Your first option is to set up an installment agreement with the IRS. Payment plans can be arranged by filing IRS form 9465 "Installment Agreement Request" with your tax return. A one-time application fee of $150 may apply, and you will make periodic payments if your application is successful.
Some companies offer to arrange with the IRS to settle your debt for a portion of what is owed. These may often be deceptions. Essentially, they help you make an "offer in compromise" (OIC) to the IRS. An OIC is viewed as a last resort, and many proposals are not successful. To see if a compromise is possible for you, use the checklist in IRS form 656 "Offer in Compromise" to see if you meet the income requirements. If you do, complete form 656A. There may be a $150 application fee.
Other restrictions apply, so be sure to read all relevant IRS information completely. IRS forms are available from the IRS Web site at www.IRS.gov.
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