- 1). Arrange to pay the tax debt in full. You may have the ability to pay the tax due out of your savings. You can write a check or withdraw the money from the bank to pay the IRS. If you do not have the money to pay the tax in your savings, you can obtain a home equity line of credit if you do not already have one, use revolving credit such as credit cards, or obtain a personal loan.
- 2). Submit a settlement offer. Fill out Form 656, which is an Offer in Compromise, which will allow you to make monthly payments on the tax debt to avoid the IRS placing a tax lien on your house. There is contact information on the IRS website. You can click on the "Contact" tab in the upper corner of the web page to access phone numbers and locations for the IRS. The IRS may instruct you to fill out Form 656, which is an Offer to Compromise. This form must be completed properly, so you may want to download Form 656-B, which are instructions on how to complete an Offer in Compromise. You should complete the offer and submit the $150 application fee to the IRS. You will be able to check the status of your offer by calling 1-800-829-1040. If accepted, you should visit an IRS office and make payment or mail to the IRS for the location nearest you.
- 3). Mortgage your property. If you do not owe mortgages on your house, find a lender and obtain a loan to pay the tax due. If you do have a mortgage, try to refinance it to obtain money to pay off the mortgage and get enough money to pay the taxes.
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