What if the tax filing deadlines roll around and you just don’t have the money to pay your tax obligations? What do you do? The first thing to do is to file anyway. You simply can’t avoid your obligations to the IRS and they will file penalties against you if you don’t file and don’t pay your tax obligations. If you at least file your taxes you will avoid a “failure to file” penalty. If you owe more money than you have access to, at least pay what you can. Paying something will at least show the IRS you are making the effort and will also cut down on the interest and penalties that will be assessed in the long run. The lower your up front balance, the less you will have to pay later on and you will make yourself a less likely target for an IRS audit.
Do you have any friends or family who can help you pay off your balance? You can likely work out a lower payment arrangement with them than the Interest and penalties the IRS will charge. Do you have access to credit cards that you could use to pay off the balance? Again make certain the interest rates on the credit card won’t be higher than what the IRS would charge. Some individuals also take out lines of credit against their mortgage or home loans to pay IRS taxes owed.
Talk to the IRS. This should be one of the first things you do; talk to an IRS agent. They may be willing to enter into an installment agreement with you. You would be able to make payments over time to address the money owed. If you owe less than $25,000 you can apply for an installment agreement online. If you’re suffering a severe financial hardship that doesn’t have an end in sight, the IRS may agree to temporarily suspend collection actions against you. They will still add penalties and interest to the amount owed but they may cease efforts to collect.
If your attempts to come to an agreement on payments with the IRS under an installment plan don’t come to fruition, you may want to think about an Offer in compromise. An OIC agreement is made between you and the IRS in an attempt to come up with a lower figure being owed to them. Keep in mind that many OICs are rejected by the IRS and you are left holding the bag with regards to the fees it took to file the OIC and you will still be indebted to the original amount, plus penalties and interest owed. Before you consider this option talk with a trusted tax or accounting professional.
Remember, no matter what direction you take, you can’t avoid the IRS and the money that you owe. You need to face your obligations head on as they will not go away. Talk to a tax professional as a way to face the obligations and avoid an IRS audit.
Experiencing tax problems with the IRS? Contact Guardian Tax Resolutions. The Guardian will help you resolve your tax issues with the IRS.
Related posts:
- The Relation Between Bankruptcy And Taxes
- Avoiding Tax Debt: 10 Tips
- 5 Costly Tax Myths
- Tax Tips For The Recently Married
- How To Invest Your IRS Tax Refund Check
- Protecting Your Documents In A Natural Disaster
- How to Avoid Investment Penalties on Canadian Savings Plans
- Ways To Avoid A Tax Audit
- Implications Of Tax Burdens And And Filing Bankruptcy
- Why It Is Best For Your Business To Hire A Chartered Accountant To Do Your Taxes
Tags: Debt, identity theft, IRS, tax, tax problems, Tax Refund, tax relief, taxes