What should you do if you owe the IRS money?

Answer 1

It is always a good idea to try to understand as much as possible about the issue and the cause of the liability. You could owe for a return that was filed on your behalf, this is known as a Substitute for Return. If that is the case, it may be in your best interest to file your own return to replace the SFR. Now, if you owe the IRS, the bottomline is that you have 4 options (I don't consider ignoring them an option): 1_ You can pay the liability in full by mailing them a check. Do however make sure that the amount is being applied correctly to the years in question. 2_ Enter an installment agreement to pay the liability over time, just like a car payment the interest and penalties will continue to accrue until either the balance is paid in full or the Statute of limitations expires. There are different types of installment agreements, they can be streamline, or fully negotiated depending on your financial situation and the amount of the debt. 3_ There is a program called currently not collectible that can be negotiated with the IRS, this program is for taxpayers that have not an ability to pay on a monthly basis. It is a fully negotiated agreement where you have to prove that you do not have the ability to pay. 4_ Finally there is the Offer in Compromise programs, where you offer the IRS an amount and if they accept then they write off the balance on your account. Regardless of what many unethical companies would have you believe on late night TV, this program is very seldom a good option for most taxpayers. Having said that, it is a legitimate program that many taxpayers can benefit from if they qualify. There is a small print that needs to be taken into consideration along with a tax professional that deals with this type of issue on a daily basis. Hope this helps. Roger Hadad, Effectur Inc., www.irs101.blogspot.com