Grovetown, GA asked in Tax Law for Georgia

Q: Strategically paying the IRS before filing previous years returns in order to qualify for a long-term payment plan.

I owe the IRS for previous years around $65K and have not yet filed for those years. I would love to set up a payment plan, but according to their website, in order to qualify for a long-term payment plan "you must owe $50,000 or less in combined tax, penalties and interest, and filed all required returns."

See here: 
https://www.irs.gov/payments/payment-plans-installment-agreements

The problem is:

1.) I owe more than 50K, which means if I file, they will demand payment in full or demand it all within 120 days. (I do not have the money to do this)

Can I strategically submit a payment to the IRS for 30K (all I can possibly do now) and THEN file my previous tax returns? This way I will owe less than 50K AND will have filed the previous years. (thus meeting eligibility enter a long-term payment plan)

Would this be a safe/smart move? I want to pay my due taxes but I don't want to risk losing everything. What would you do?

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1 Lawyer Answer
D. Mathew Blackburn
D. Mathew Blackburn
Answered
  • Tax Law Lawyer
  • Englewood, CO

A: You are not eligible for any resolution plan until you are in compliance. So until you file those prior year returns your application for an installment agreement will be rejected.

Making a lump sum payment will reduce your IA amount and reduces interest on your account.

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