I’m paying the IRS $615 a month on a payment plan and haven’t gotten any scary letters, but I’m really stressed out about it. What worries me more is that even bankruptcy wouldn’t wipe this debt away.
Here’s what I owe:
$4,167.75 from 2016
$9,965.47 from 2017
$45.64 from 2019
And I haven’t filed for 2020, 2021, 2022, or 2023. Any advice on what I should do next?
First, file your taxes for those missed years! Then you can try to renegotiate your payment plan. The IRS isn’t like other creditors—they’ll always expect to be paid. If you ever have a refund due in the future, they’ll just apply it to your debt. Not filing your taxes just makes things worse in the long run.
You’re right that bankruptcy won’t help with IRS debt. Why haven’t you filed your taxes for the last four years? You’re only making things harder for yourself. Do you not have any tax withheld from your paycheck? You should really get help from a financial counselor soon.
@Blake
Actually, some IRS debt can be wiped out in Chapter 7 bankruptcy. The debt has to be more than three years old, and the returns have to be filed at least two years ago.
Ainsley said:
@Blake
Actually, some IRS debt can be wiped out in Chapter 7 bankruptcy. The debt has to be more than three years old, and the returns have to be filed at least two years ago.
Chapter 7 doesn’t erase tax debt! It can put the debt on hold for 10 years, but then you still owe it. I’ve been through Chapter 7 twice, and this is how it worked for me. Unless the tax debt has been uncollectible for 10 years, it’s not going anywhere. The OP really needs to file those missing years.
@Cass
You’re wrong. A quick search will show that some tax debt can be discharged.
Ainsley said:
@Blake
Actually, some IRS debt can be wiped out in Chapter 7 bankruptcy. The debt has to be more than three years old, and the returns have to be filed at least two years ago.
The OP hasn’t said how old this debt is, and they already have a payment plan in place. They also haven’t filed taxes for the last four years, which could be considered criminal. This situation isn’t covered by Chapter 7 bankruptcy.
@Blake
The years are listed in the post. The debts from 2016-2019 could be wiped out, but the OP would need to file those missing years. Once they do that, they could consider bankruptcy down the road if needed.
@Blake
At this point, it feels like I’ll be stuck with monthly payments forever just to catch up. Who should I reach out to for help? Financial counselor could mean a lot of things.
Micah said:
@Blake
At this point, it feels like I’ll be stuck with monthly payments forever just to catch up. Who should I reach out to for help? Financial counselor could mean a lot of things.
It’s not going to be monthly payments forever. If you ignore this, you could end up with criminal charges. This isn’t like some subscription—you owe the government.
Micah said:
@Blake
At this point, it feels like I’ll be stuck with monthly payments forever just to catch up. Who should I reach out to for help? Financial counselor could mean a lot of things.
Why didn’t you file your taxes for the last four years? This could be considered tax evasion, which is a serious crime. What’s going on with your situation?
Just keep making your payments and file your back taxes. The IRS won’t bother you as long as you’re doing that (speaking from experience). They don’t want to ruin your life, especially if you’re not a big fish.
I’ve been in a similar spot, and I understand how quickly things can get out of hand. You keep thinking you’ll get it sorted, but suddenly it’s been years and the problem feels impossible to fix. Ignore the judgmental comments. It’s hard to talk about this stuff, and it’s a tough situation. You’re not alone—this happens to a lot of people.
You might be eligible for Chapter 7 bankruptcy depending on your income and assets. The 2016-2019 debts could be wiped out. The rule is that the debt has to be at least three years old and the tax returns have to be filed for more than two years. To clear more recent debt, you’d have to file those returns and wait two years.
The most important thing is to stay in contact with the IRS. They won’t throw you in jail, but they could freeze your accounts or take other action if you ignore them.
I was lucky to find an accountant who helped me file several years’ worth of returns and let me pay over time. After filing, I was able to get on a payment plan, and the IRS has been reasonable about the amount I have to pay monthly.
If you’re getting letters about possible collections, take them seriously and call the IRS right away. I used to be terrified of calling, but they’ve been surprisingly helpful. Yes, the hold times are long, but they want to work with you. Also, look for local organizations that help people in this situation, or ask the IRS if they know of any.
Once you file everything, you can set up a payment plan. And if you end up needing to file bankruptcy later, so be it. There’s no shame in that. Mistakes happen.
You can get through this—just take that first step and keep going.
PS: There’s also something called an Offer in Compromise. It’s worth looking into on the IRS website. Depending on your situation, you might be able to settle for less than you owe. But you’ll need to be current on all filings and payments before you apply.
PPS: Some comments here are spreading bad info. Even if you’re making payments, not filing your returns could default your payment plan. You need to act quickly.
File those missing years! I’m in a payment plan too, and since I’ve been making payments on time, the IRS hasn’t bothered me at all. I owe around $3k.
Why would you be getting threatening letters if you’re already making payments?
Harlow said:
Why would you be getting threatening letters if you’re already making payments?
Because they haven’t filed their tax returns for four years.
If you’re making your payments as agreed, the IRS isn’t going to escalate things. Just keep paying, or even pay extra if you can, to get rid of that debt.
But not filing for 2020 and beyond? That’s a big issue. You should get help from a tax professional to sort that out.
This is like someone having their fourth kid and still being surprised they’re pregnant again. Dude, get it together. But seriously, you need to fix this before garnishment happens—it’s going to be a lot worse if it gets to that point.
@Whit
Thanks for the helpful response, that really cleared things up.
Micah said:
@Whit
Thanks for the helpful response, that really cleared things up.
You should look for a lawyer who specializes in IRS issues. This could go in many directions.