The idea of getting notifications from the Internal Revenue Service fills most people with dread. They know it can't be good news when they see official mail. Most individuals see paying taxes as a necessary evil, and they want as little contact with this agency as possible. If you don't have the money to pay the Internal Revenue Service what you owe it, just filing an extension won't do you any good. You have to pay the amount owed by the deadline regardless of which forms you fill out. Although delaying tactics are not an option, there are other affordable tax relief plans that may work for you.
There are any number of reasons why you don't want to get in trouble with the IRS in the first place. The Internal Revenue Service can, and will, garnish your wages if you are employed. It can even garnish Social Security. It can seize assets. If you have a checking or savings account, the IRS can instruct your bank to immediately remove all available funds in your account, up to the amount they say you owe, and send the money to them after a three week period.
These things don't have to happen however, even though the IRS will do them as a last resort. They would rather work with you, but you must do your part by communicating and cooperating with them. One of the most common ways to pay back taxes is by setting up an installment plan approved by the IRS. You will make payments every month until you are free and clear of the debt.
You may be able to negotiate a compromise with the IRS and pay back less than you owe by making a lump sum payment or paying the reduced amount over a short term. This compromise has the added benefit of saving you a lot of money in interest and penalties.
You may be able to prove you are currently unable to pay anything to the Internal Revenue Service, in which case you will become what is known as "not currently collectible". If this happens you may be able to buy some time and retain assets until you can work something else out.
Putting debt on a credit card may or may not be a good idea. It will probably depend on how much you owe and what your credit card interest rate is. There are settlement companies that claim to work with individuals. If you decide to use one of them, be sure to get all agreements in writing.
Under certain circumstances you can be relieved of your IRS debt by filing bankruptcy. You shouldn't file though unless you know you qualify under the bankruptcy code. When you're the spouse of someone who owes back taxes, you may come under the IRS's innocent spouse guidelines and not be held responsible.
The easiest way to avoid IRS problems is to file your returns, electronically if possible, and pay anything you owe. When you can't do that, let them know as soon as possible.
There are any number of reasons why you don't want to get in trouble with the IRS in the first place. The Internal Revenue Service can, and will, garnish your wages if you are employed. It can even garnish Social Security. It can seize assets. If you have a checking or savings account, the IRS can instruct your bank to immediately remove all available funds in your account, up to the amount they say you owe, and send the money to them after a three week period.
These things don't have to happen however, even though the IRS will do them as a last resort. They would rather work with you, but you must do your part by communicating and cooperating with them. One of the most common ways to pay back taxes is by setting up an installment plan approved by the IRS. You will make payments every month until you are free and clear of the debt.
You may be able to negotiate a compromise with the IRS and pay back less than you owe by making a lump sum payment or paying the reduced amount over a short term. This compromise has the added benefit of saving you a lot of money in interest and penalties.
You may be able to prove you are currently unable to pay anything to the Internal Revenue Service, in which case you will become what is known as "not currently collectible". If this happens you may be able to buy some time and retain assets until you can work something else out.
Putting debt on a credit card may or may not be a good idea. It will probably depend on how much you owe and what your credit card interest rate is. There are settlement companies that claim to work with individuals. If you decide to use one of them, be sure to get all agreements in writing.
Under certain circumstances you can be relieved of your IRS debt by filing bankruptcy. You shouldn't file though unless you know you qualify under the bankruptcy code. When you're the spouse of someone who owes back taxes, you may come under the IRS's innocent spouse guidelines and not be held responsible.
The easiest way to avoid IRS problems is to file your returns, electronically if possible, and pay anything you owe. When you can't do that, let them know as soon as possible.
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