It is not uncommon for expat taxpayers to find themselves in a situation where they need assistance handling the burden from their expat taxes. Many individuals are unaware of their obligations to file, and so find themselves with a significant tax burden that is simply beyond the realm of possibility when it comes time to pay.  Others may have failed to recognize this requirement for years and have ended up with significant penalties and interest on their US expat taxes.  The IRS does understand when it comes to situations like this and does offer options for taxpayers who are unable to pay their tax obligations.  Such options include different types of payment plans or an offer-in-compromise, both brining different procedures and consequences - while paying the IRS of course.

Expat Tax Return Payment Plans

If you are unable to make the entire payment on your expat taxes for a certain year or for multiple years of filing, the IRS is more than happy to set up monthly installment plan for you. To qualify, individuals must prove that they have looked at other options, including liquidating assets, loans and taking out credit cards.  If none of these options for payment make sense, the IRS will allow you to set up a monthly amount with a $25 minimum.  Taxpayers who need to take this option in order to pay their expat taxes must apply for a payment plan with Form 9465.  The IRS does charge a fee to set up a payment plan if it is longer than 120 days.

Temporary Delay for Expat Taxes

Some taxpayers may find themselves in a pickle when it comes time to pay their expat taxes, but will be able to pay the taxes that are due in the near future.  If the taxpayer is under unique financial stress and is unable to make immediate payment, the IRS will delay the due date on payments with a temporary delay.  The drawback to postponing this payment is that the will IRS file a Notice of Federal Tax Lien in order to ensure the government’s interest in your assets.  This may prove to be detrimental to your financial standing in regards to other financial institutions.

Expat Tax Return Offers in Compromise

Often times seen as the first way out with taxpayers who need help with the expat taxes owed, an Offer in Compromise is what the IRS thinks of as a “last resort” to receiving payment from their taxpayers.  If the IRS evaluates the situation and feels that they are unlikely to receive the total taxes owed, they will consider an Offer in Compromise. Generally speaking, the IRS will agree to an amount that is deemed to be higher than what the taxpayer would be able to pay in a reasonable amount of time.  Taxpayers will need to apply for an Offer in Compromise (OIC) via Form 433-1 (OIC).  The IRS does not want this to be the first choice for taxpayers and charges a $150 fee for evaluating any Offer in Compromise to ensure other options have been considered by the taxpayer.

Help with Your Expat Taxes

While it can be daunting, the IRS can actually be quite reasonable if you find yourself unable to pay your expat taxes for whatever reason. Whether it is a liquidity problem, a temporary issue with finances or simply being unable to pay the expat taxes owed in any reasonable amount of time, the IRS does have tools in place to offer help for those who cannot afford the liabilities from their expatriate tax return.  Expatriate and income tax software is the place to start. If that isn't enough, the next step is to find an expert expat tax advisor, who can discuss your needs and how best to proceed.