Paying Overdue Taxes to the IRS
By: Chintamani | Posted: 23rd November 2009
If you owe overdue taxes to the IRS you cannot ignore paying them. Interest, fines, and penalties accrue from April 16 until the full debt is resolved. If you owe, you need to pay as soon as you possibly can, even if it means you have to use credit cards or the equity in your home. Even the highest interest credit card or the highest interest equity loan are nothing in comparison to the debt that is mounting day by day with the IRS.
If you really cannot pay your taxes, you might be qualified to gat a tax discharge. This would mean that you receive complete forgiveness on the back taxes and own nothing at all. For this to take place, your back taxes should be threes years overdue, at least. Next, you must be able to prove that your failure to pay involved no deception or fraud on your part and that you are not just simply attempting to avoid payment. You must be able to fully document that your financial troubles make it impossible to pay what you owe and that your past returns were in no way falsified.
If you owe the Internal Revenue Service tax money and cannot pay in one lump sum, you may want to seek to make an installment arrangement with the Internal Revenue Service. In order to qualify for a partial payment plan with the Internal Revenue Service you will need to be current with your most recent income tax filing and you must have submitted all previous years' income tax returns, as well.
An installment agreement can be reached under the terms of partial payment. That is to say, that if you owe the Internal Revenue Service back taxes and you come to an agreement to make a settlement payment, say fifty cents on the dollar, to satisfy the claim, you can make those payments on an installment plan even though the Internal Revenue Service will not collect your debt in full upon completion of payments. Once you have paid the agreed amount of settlement, the Internal Revenue Service will forgive the balance.
Before going into this type of arrangement, you need to know exactly how much money the Internal Revenue Service has determined you owe, including interest and penalties. If you are uncertain about the sum, the Internal Revenue Service will provide you with the breakdown and copies of your income tax filings.
You might want to engage the services of a tax resolution expert to help you in filing forms and applying for a tax resolution installment option. Together, you will need to arrive at a conclusion of how much you can afford to pay. In support of this conclusion, you will need to provide the Internal Revenue Service with three months documentation as to income versus expenses. You will then need to send the Internal Revenue Service a letter expressing your desire to resolve the matter via an installment arrangement.
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Tags: failure, fraud, credit cards, irs, forgiveness, lump sum, fifty cents, interest credit card, financial troubles, internal revenue service, installment agreement, tax money, previous years, income tax returns, threes, back taxes, installment plan