Can't Pay Your Taxes? There Are Many Ways to Approach This Very Common Situation.
Come April 15, if you can't pay your taxes, be not afraid! There are alternatives that you can follow to make your life easier. And, the IRS will side with you and give you a break. Here's what to do:
1. File Form 9465--By filling out this form, you will be allowed to pay by installments. Simply attach Form 9465 to your Form 1040. Then indicate how much you can pay. The IRS will then decide if your installment payment offer is acceptable. Usually it will be, but there is a catch. You must make your installment payment as agreed. If you miss a payment, you'll be penalized. Interest and penalties may total 11% or more. So if you offer to pay by installment, be sure you can pay it, be sure to keep your word.
2. Pay Late (Without Installment)--This is like playing a hide and seek game. And if you play it right, you can win. Here's how:
* File your usual From 1040.* Send in some money as soon as you receive your first notice of the tax due.
* Follow up with some money each time you get a collection notice. Include with each notice a short note explaining why you cannot pay in full. It may be illness or a lost job.
* Inform the IRS that you will try your best to pay as much as you can.
This method should buy you a few months, within which you should be able to save enough money to pay off your balance.
3. Ask For a Reduction--The IRS may reduce about 1/3 of its penalties. But you've got to have a good reason, such as mistaken advice from a tax professional or loss of records or another situation that's beyond your control.
4. Reach a Compromise--This is called an "Offer In Compromise" (OIC). The IRS will accept this only if it's in their favor. That is, if your compromise is more than it could get by taking and selling your assets. You have to have proof showing it to be to the their advantage. Use Form 646.
5. Last Resort--Ask for help from your Congressman. Everybody in Congress has a contact at the IRS. But remember, you can only use this method if you're receiving unfair treatment. And once you resort to this approach, the IRS may be less likely to strike a deal with you.
Disclaimer--The above is given as a suggestion only. The Author is not responsible for any loss or legal action resulting therefrom. Each individual is advised to seek legal and/or an accounting professional's advice before making a final decision.
Muyi Shogbuyi is an author and freelance writer with 20 years of experience as a financial advisor. His latest book is titled, GET OUT OF DEBT AND STAY OUT OF DEBT THE EASY WAY! For more information and a FREE report about becoming debt-free, send a self-addressed, stamped envelope to:
Muyi Shogbuyi The Debt Doctor 4753 N. Broadway #618A Chicago, IL 60640 (773) 728-7117
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