Can I Negotiate My Tax Debt With The Irs?

FOCUS - How to apply? Who to send it to? In which cases? The Figaro decrypts the procedure that allows to negotiate a staggered time of payment of taxes.

More and more taxpayers are struggling to pay their taxes. Although, in principle, the tax authorities do not grant a payment deadline, exceptions may be made to defer or spread over time the recovery of sums due to the State.

• In which cases can an application be made?

In the event of a 30% or more decrease in income compared to the previous year, a taxpayer may benefit from a staggered payment.

In the case of "life-threatening" difficulties, such as separation, an accident resulting in disability, a long illness or the death of a spouse, an ex gratia request may be made.

• Who should formulate the request?

It is the taxpayer on whose behalf the tax must be paid who must ask for the delay. If he is unable to do so, he must give a mandate to a third party who will apply in his place. This mandate consists of a simple power of attorney on paper, signed by the original applicant, where all the information necessary to identify the taxpayer and the tax associated with him will appear.

Some third parties do not need a formal mandate to make this request. Spouses with joint taxation, members of an undivided cohabitation or the heirs of a deceased taxpayer will have no mandate.

• How to apply?

It is best to notify the tax administration even before receiving the tax form, although the request can only be formally made once the tax recovery phase has been initiated. It can then be carried out at any time, without any particular deadline, although it is preferable to do it before the deadline of payment of the taxes in order not to risk to unduly irritate the administration to whom you request a delay.

The Taxes website specifies that requests "can be written (simple mail) or oral (in this case, a visit card is drawn up by the tax office and signed by the taxpayer)".

For taxpayers whose income has dropped by 30% or more, a specific form must be completed before the tax deadline.

• To whom to apply?

As a general rule, the request must be made to the service on which the place of taxation depends, that is to say most of the time the center of public finances.

If the request relates more specifically to a tax that must be paid to the Treasury or the remittance of the increase of 10%, the application must be addressed to him. Just like the application form for taxpayers whose income has dropped by 30% or more.

The Taxes website also specifies that as regards "the taxes established by a Tax Control Department (DIRCOFI) as well as by a national or specialized management, the request can also be addressed to the director in charge of this direction".

• What conditions must be fulfilled?

Each situation is studied on a case-by-case basis, depending on the actual payment capacity of the taxpayer (income, assets, allowances related to expenses necessary for everyday life and tax debt). It is advisable to add to any request documents that can justify: attestations of salary or allowances in case of decline in income, an act of divorce or rupture of PACs in case of separation, for example.

In exchange for a payment facility, the tax authorities may be able to demand collateral, such as a mortgage if the applicant is the owner or a bank guarantee if this is not the case.

• Is the request suspensive of the payment of taxes?

Never. This means that if the plaintiff does not pay his taxes on time without having received another schedule from the tax office, he will have to pay interest for late payment, although he has made a request for payments.

On the other hand, most of the time, the accountant does not claim the 10% surcharge for late payment.

• How soon does the response arrive?

The administration has two months to respond positively to the request. After this time, it is automatically considered rejected.

If the file is particularly complex, this period may be extended to four months but the administration must then inform the applicant before the expiry of the two-month period.

• What to do if the application is rejected?

In the event of refusal by the administration, the taxpayer has the possibility of contesting the decision by means of a hierarchical appeal (appeal) or by judicial way, once he has exhausted all the administrative recourses. He may then apply for an action for ultra vires in the courts.