"What Do You Do If You Can't Pay Your Taxes?"
By Peg Bastin
What if you cannot pay the taxes you owe for 2003? Here
are some helpful options to keep you out of trouble with
the IRS.
First, if you owe taxes this year, and you can't pay the
full amount, the IRS advises you to still file your return
by the due date, and pay as much as you can. If you don't
file, you may get a prison sentence or stiff penalties.
It's not worth it! There are many other alternatives to
help you in this situation.
You may not be aware that you can now charge your taxes on
your American Express, MasterCard, Visa or Discover Card.
If you need to pay by credit card, contact one of the
IRS-Approved service providers and follow the instructions.
I have listed their telephone numbers and website addresses
below.
They DO charge a 'convenience fee" based on the amount you
are paying, but this fee is NOT added to your tax payment.
The two IRS-Approved charge-card service providers are:
Official Payments Corporation
Phone 1-800-2PAY-TAX (1-800-272-9829)
Web Site
http://www.officialpayments.com
Link2Gov Corporation
Phone 1-888-PAY-1040 (1-888-729-1040)
Web Site
http://www.pay1040.com
If payment by credit card is not an option for you, the IRS
MAY allow you to pay your balance in monthly installments
through an Installment Agreement, or may even settle for
less than the full amount owed through its Compromise
program.
The IRS Web site at www.irs.gov has an interactive section
you can use to determine if you are eligible for an
installment plan. You must attach a Form 9465 "Installment
Agreement Request," to the front of your tax return to
apply for an installment payment plan.
When you submit your Form 9465, make sure you show the
amount you wish to pay monthly and the date you wish to
make your payment each month. The IRS has made the approval
process easier if the amount owed is $25,000 or less, and
can be paid off over a five year period.
But DO NOT do this without the assistance of a tax
professional. ( If you don't know one, you can get free
recommendations at the following email address:
mailto:author@HomeBusinessTaxSavings.com )
The IRS charges a $43 fee for setting-up an Installment
Agreement. You will be charged interest plus a Late Payment
Penalty on the unpaid balance. This penalty, usually only
0.5 (one-half)percent of the balance due per month, drops
to a 0.25 (one-quarter) percent rate when the IRS approves
the Installment Agreement if your return was filed on time
and you did not receive a levy notice from the IRS.
One-quarter percent per month is less than 4 percent per
year.
So if you qualify for the reduced late payment penalty,
by filing your return by the due date, you avoid the late
filing penalty which is Five Percent Per Month of the
balance due. This is more than 60% per year!!! Pay as much
as you can when you file your return to reduce interest and
penalty charges.
If you still can't pay the taxes you owe, even with an
installment plan, you may apply for an "Offer in
Compromise." You may be able to settle your tax debt
for less than the full amount owed.
Acceptance is NOT automatic. Your financial situation and
future income potential will be reviewed by the IRS to
determine whether your offer is appropriate.
Always work with a tax professional when you do this. Send
Form 656, "Offer in Compromise," and Form 433-A,
"Collection Information Statement," to the IRS to determine
your eligibility. There is a $150 application fee.
If your income is very low, you may be exempt from this
fee. You must file Form 656-A if you are claiming a Poverty
Exception, "Income Certification for Offer in Compromise
Application Fee."
Don't "skip filing" your tax return, just because you can't
pay your tax bill. Why? The consequences just aren't worth
it. There are a number of options for you to choose from
and avoid the wrath of the IRS.
I hope these articles have helped you in filing your tax
returns this year. I will keep in touch and let you know
when I have more information to help you.
***** ***** ***** ***** *****
Written by Peg Bastin, who is an avid internet marketer,
glad to help others get started in their own online biz,
with Ron Mueller, author of "It's How Much You KEEP,
That Counts! Not how much you Make" © 04/12/2004
Home-Business Tax-Deductions.
Do YOU Qualify? Are You SURE?
http://www.bastinmarket.com/taxpreparation.html
Free ebook:
http://www.bastinmarket.com/taxesdl.html
***** ***** ***** ***** *****
You have permission to publish this article electronically
or in print, free of charge, as long as the bylines are
included. A courtesy copy of your publication would be
appreciated.
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