When you owe a tax debt to the IRS, you may be eligible for a payment plan. The IRS has several plans available, including the partial payment installment agreement (PPIA) and the Offer in Compromise (OIC). Let's compare the two to see which might be best for your situation.
A PPIA allows you to pay back your tax debt in manageable monthly installments based on your ability to pay. Once the Collection Statute Expiration Date (CSED) is reached—usually 10 years after the tax debt was assessed—any remaining balance is forgiven.
Pros of a PPIA
Cons of a PPIA
With an OIC, you can settle your tax debt for less than the full amount owed. It's typically granted when paying the full debt would cause financial hardship or if there's doubt about liability or collectibility. With an OIC, you would offer to pay a lump sum or make short-term payments.
Pros of an OIC
Cons of an OIC
Read more details about the OIC on our Offer in Compromise resource page.
If you're unsure which option is right for your situation, consulting a tax attorney is crucial. At Gabaie & Associates, LLC, we can analyze your finances, determine eligibility, and guide you toward the best solution for resolving your tax debt. Call us today at (410) 358-1500 to request a free consultation. You can also fill out our contact form, and we'll reach out to you.
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