As you know, the economy is affecting millions of people in a number of different ways. Some are losing their homes, others are losing their jobs, and many are finding it difficult to pay the taxes that they owe the IRS.
Over the past year, the IRS has run into problems with people not being able to pay their taxes due to a job loss or another problem that has been caused by the down economy. If you find yourself in this position, remember one thing: the IRS is not going to let you go just because the economy has taken a hit. They may realize that many Americans are in trouble, but this doesn’t mean that they will “write off” your taxes and let you off the hook.
But I really can’t pay my taxes. This is the way that many people feel. Being one of them is no fun. Even though you may be in a horrible position, and not knowing when things will get better, you can still stay on the good side of the IRS while paying them what you owe.
The first question to ask yourself is simple: can I pay my tax liability in full in any way, shape, or form? Do you have savings that you can use? Are you expecting severance from your past employer? If you can pay in full you will want to do so because you never know when the economy will take its toll on your finances once again. Unfortunately, most people find that they do not have the money to pay a lump sum and end up searching for another solution.
Your next best option, and the most common, is asking the IRS for a payment plan. What is this, exactly? A payment plan allows you to pay back taxes over the span of several months or years. Instead of paying a lump you can send smaller payments each month that are more affordable. The IRS knows that a lot of Americans are having a difficult time paying taxes, so they are expecting the number of requests for payment plans (installment agreements) to increase.
Don’t want to get involved with a payment plan? There is another option that you can consider. Have you ever thought about taking out a loan to pay back the IRS? With a payment plan this is essentially what you are doing. The IRS is more or less the lender, and they will require that you pay them on time while also charging interest. If you can borrow the money and get a better deal you should consider this. Not only will you be able to save money, but there is a good chance that you can find a lower monthly payment. On top of this, the IRS will get what they want and they will once again put your account in good standing.
The economy is down, and this is hurting many Americans. If you owe the IRS money, but cannot pay because of the negative impacts of the economy, it is important to consider every available option. Remember you can always receive professional tax help from a firm like ours to reduce your load, the possibility of errors with certain forms, and possibly the amount you have to pay the IRS.
Related posts:
