Advice On Debt And Paying Off Back Taxes
Posted on
June 2, 2009
at
1:17 am
I owe about $11k on back taxes haven't filed my tax return since 2006--due to unemployment and other personal concerns. I saw some tax relief advertisement so I called. They wanted $2k for their services. I wonder what I can do, by myself, I am nearing retirement by the way, to pay off that $11k.Any advice would be appreciated. Thank you in advance.
Posted on
June 2, 2009
at
1:37 am
The first thing that you should do is file all those back taxes with the IRS and maybe then they would speak with you regarding repayment via an installment agreement or what via an offer in compromise. You may need to qualify for the offer in compromise though and if the IRS rejects your application you may take it up to the IRS Appeals Office. I said that because it is up to the IRS discretion whether or not to accept this offer in compromise, as it is not a consumer's legal right to have his/her tax bill reduced by them.Remember that this is a formal process and they would only consider your application if it is properly submitted.
Posted on
June 2, 2009
at
1:41 am
The installment plan sounds interesting, can anybody elaborate on it?
Posted on
June 2, 2009
at
1:56 am
You have to be current on this year's tax returns dear. The IRS computers will show all your past due tax returns, and you would not be eligible for that monthly installment plan.
Posted on
June 2, 2009
at
2:07 am
Although the monthly installment plan of IA is the most popular method of paying old IRS debts--it lasts typically for 6o months, which if you ask me, is a pretty long time--it may not be your best option. Since it takes so long to repay, the interest is 8% to 10% a year, and there are penalties too which may just increase what you owe over the years.Maybe you should look for other methods to pay off your debts. I am not even sure if bankruptcy is an option for you...
Posted on
June 2, 2009
at
2:19 am
I think bankruptcy is a very bad idea.The Offer in Compromise Program, I think, I am not sure can solve your problem like a debt settlement program solves credit card debts. I think that if you qualify for the IRS OIC, it would give you the chance to pay a small amount and then they'd consider it as full and final settlement. I am not sure.
Posted on
June 2, 2009
at
2:50 am
About the OIC:1. There is a$150 application/filing fee.( you may be exempted from the fee if your monthly income is below the poverty guidelines and submit an Application Fee Worksheet, which you can get from the Form 656 booklet)2. You have to attach it to Form 656. 3. You also have to submit Form 433-A or Collection Information Statement.( if you are married and are in community property state, include data on your spouse, even if you are filing individually)
Posted on
June 2, 2009
at
2:56 am
These all sound so complicated. I am now wondering if it is possible for the IRS to send me to prison and on what grounds..
Posted on
June 2, 2009
at
3:04 am
As far as I know the IRS is willing to work with you, you only have to communicate with them, and let them know your situation. Although they have the right to take over or sell your personal properties, garnish your wages or bank accounts, or put a lien on your home, I am not sure about jail.As mentioned above they offer assistance to consumers who have debts less than $25k in amount.
Posted on
June 2, 2009
at
3:18 am
The best way for you to have peace of mind is to not wait for the IRS to come after you even if it has been years since you last filed.As for jail, there are many tax evasion cases that resulted into imprisonment, but don't be alarmed just yet. The IRS' first move, usually, is to get restitution (payment in full) from the consumer via judgment. Jail is usually reserved for the criminals (and it has to go through the courts first).If you have every intention to pay. Visit the IRS office and communicate your intention to do so.
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