Most people in the US at least, have a great discontent filing their taxes. Even when you are going to receive a return, the process is still unnerving. So you filed your taxes, now, what if it isn’t a refund and instead it is a large tax bill. What can you do with a tax bill you really can’t pay for?
First of all, it’s not a good idea to owe the IRS money. One of problems with this type of debt is that it cannot be removed. It doesn’t go to a credit agency with bill collectors harassing you. It’s the IRS and you will owe them forever!
The IRS system is not full proof though, there is always human error. If the amount that you think you owe and the amount that the IRS system is showing you owe varies, you can dispute this amount. However, make sure you are correct in your findings.
If you can’t pay this bill don’t pay it right away. Everyone needs a certain amount to live on and if you give it all away, you might not recover. I good rule of thumb is too look at your fluid cash and if you have the fluid cash then pay. Otherwise, you can call the government and they will work with you. Often time they are sympathetic if you are sincere and backup your information with solid evidence and truth. What you do not want to do is pay your tax debt with a credit card. You will end up paying twice as much and have twice the hassle.
If you wait to long you may receive a tax due notification. Don’t wait for this. If you know you owe taxes, take your adjusted gross income, the amount you owe, your social security card and start the process. When your form has been submitted, you can file go to the IRS website and file an Online Payment Agreement. This form will ask you questions like, how much are you able to pay and when can you pay this debt off. The government will come up with a solution for you for payments. One item to note is that the government will charge you for this process. The fee will be between $43 and $225.
If you have recently come across some serious financial hardship, the IRS might delay your collection, but late fees and interest will still be applied. Remember, this is the government and although they take into account certain considerations, they need a solution from you. In this matter, if you own property, there is always a possibility of federal tax liens. Stay current with the IRS and if you do have property. Make sure you do everything possible according to the IRS guidelines to keep that property.
Ok. So you have exhausted these options, what is the next and last thing you can do? There is the Offer In Compromise option.This option is only available or possible if the IRS thinks you will never fulfill you tax debt. The Offer In Compromise option only happens in complicated situations, so make sure you know your guidelines and please be honest!