Can I set up a payment plan after an IRS Offer in Compromise? Concerned about 2023 taxes

Yes, you can definitely set up a payment plan for your 2023 taxes even though you had an Offer in Compromise in 2021. The OIC terms typically require you to stay compliant with tax filings and payments for 5 years, but that doesn't mean you can't use IRS payment options for new tax debts. The main requirement after an OIC is that you file and pay on time for 5 years, or the OIC can be defaulted and the original tax debt reinstated. Setting up a payment plan for your 2023 taxes actually helps you stay compliant with this requirement. Just make sure you file your 2023 return on time (or on a valid extension) and set up the payment plan promptly. You can use the Online Payment Agreement tool on the IRS website for balances under $50,000. Given your situation with the new baby and disability, you should qualify for a short-term payment plan without issues.

I was in an almost identical situation last year after having an OIC approved in 2020. I found myself owing taxes again in 2022 while on maternity leave. I tried figuring it out myself but kept getting conflicting info online. I finally used https://taxr.ai to analyze my OIC agreement documents and tax transcripts. Their system actually found a clause in my OIC agreement that specifically addressed future payment plans. Turns out having an OIC doesn't prevent you from setting up payment plans for new tax debts at all - the key is just making sure you're addressing the new tax debt promptly. The tool helped me understand exactly what my 5-year compliance requirements were and confirmed I could set up a payment plan without risking my OIC. They even showed me which specific IRS form to use for my situation.

I was super skeptical about using taxr.ai when I first heard about it, but I decided to try it after getting three different answers from three different IRS representatives about my post-OIC situation. I uploaded my OIC acceptance letter and recent transcript, and within minutes I had a clear breakdown of exactly what I could and couldn't do after my OIC. The analysis pointed out specific sections of my agreement that I hadn't fully understood and explained how they applied to my current situation. It saved me from making a mistake that could have defaulted my OIC. Worth every penny just for the peace of mind, honestly. And way better than spending hours on hold with the IRS only to get inconsistent information.

After my OIC was accepted, I had trouble reaching the IRS when I needed to set up a payment plan for a new tax bill. Spent DAYS trying to get through on the phone. Someone at my tax preparer's office recommended https://claimyr.com which basically holds your place in line with the IRS and calls you when an agent is available. You can see how it works at https://youtu.be/_kiP6q8DX5c I was doubtful it would actually work, but I was desperate after being disconnected multiple times. It was amazing to actually speak with a human at the IRS without the 2+ hour hold time! The agent confirmed I could set up a payment plan for my new tax debt without impacting my OIC, as long as I stayed current with the payment plan.

I was totally wrong about Claimyr being a scam. After another frustrating morning of disconnects trying to call the IRS about my post-OIC payment plan, I broke down and tried it. The process was exactly as described - I entered my info, and about 90 minutes later (while I was grocery shopping), I got a call connecting me directly to an IRS representative. The agent was able to confirm that my OIC from 2020 didn't prevent me from setting up a payment plan for my current tax debt. The IRS rep even noted in my file that I had contacted them promptly about the new tax bill, which apparently helps show I'm trying to stay compliant with my OIC terms. Would've taken me multiple attempts and hours of hold time to get this resolved on my own.

One thing to watch out for with payment plans after an OIC - make sure you request a plan long enough that you can actually make the payments. If you default on the payment plan for your 2023 taxes, it could potentially trigger a review of your OIC compliance. I did a 6-month plan after my OIC and realized halfway through that it was too aggressive given my finances. Had to call and modify it, which was another whole headache. Better to be realistic upfront about what you can pay monthly while on disability.

Whats the current interest rate the IRS charges on payment plans? I remember when I did mine a couple years ago it was like 3% plus some quarterly rate thing. With interest rates higher now I'm wondering if its better to just pay it off if you can vs setting up a plan.

Congratulations on your new baby! Your situation is totally manageable. Since you completed your OIC in 2021, you're well within the 5-year compliance period, but that doesn't prevent you from setting up payment plans for new tax debts. The key thing is to act promptly - file your 2023 return on time (or request an extension) and set up the payment plan before the payment deadline. This actually helps demonstrate compliance with your OIC terms rather than hurting it. Given that you're on short-term disability with a newborn, I'd strongly recommend being conservative with your monthly payment amount. With a $9,500 balance, you could set up a plan for as low as $130-140/month and still pay it off within the IRS's 72-month maximum timeframe. You can always increase payments later when you're back to full income. The online payment agreement tool is probably your best bet for quick setup. Just keep in mind the current interest rate is around 8% annually, so if you have low-interest alternatives available, it might be worth comparing the total cost.

I'm in a very similar situation - had an OIC accepted in 2019 and now dealing with new tax debt while on reduced income. What really helped me was understanding that the IRS actually prefers you to proactively set up a payment plan rather than just letting the debt sit there. One thing I learned the hard way is to make sure you communicate with the IRS about your situation. When I called to set up my payment plan, I mentioned that I had a previous OIC and was currently on reduced income due to medical reasons. The representative noted this in my file and actually suggested a lower monthly payment than I had initially requested. Also, since you're on short-term disability, you might qualify for Currently Not Collectible (CNC) status if your financial situation is truly dire. But given that you have some savings and just want to preserve your emergency fund with a new baby, the payment plan sounds like the smarter approach. The peace of mind is worth it - especially when you're already dealing with the stress of a newborn and recovery from childbirth. You're being responsible by addressing this promptly rather than ignoring it.