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IRS payment plan | Dealing with the IRS directly

July 15, 2014 | By More
IRS payment plans

Dealing with the IRS

What happens when you just can’t afford to pay your tax bill?  Is an IRS payment plan an option?  What’s the best way to deal with the IRS directly?

The “do-it-yourself” payment plan can work for the right candidate, but knowledge and composure are key.  We asked several professionals to weigh in on IRS payment plans and dealing with the IRS directly.

The IRS does offer taxpayer payment plan options, but there are rules according to Shirley Johnson, Enrolled Agent and former IRS Agent of Altamonte Springs, FL.  The taxpayer – personal or business – must only owe taxes for one year and have filed all required returns.  The threshold is $50,000 or less for Individuals, including penalties and interest, and $25,000 or less for businesses, including payroll taxes.

Be sure you can handle the monthly payments, cautions Robert P. Sokoloff, CPA of Lincoln Park, NJ.  Once you commit to a payment plan, missing just one payment can cause the plan to go into default and the IRS will look to collect the balance in full.  On the upside, you can always send in extra to pay off early.

Michele Koscieniak CPA in Lake Worth FL adds:  Taxpayers who are more educated about their tax situation and less defensive, seem to have an easier time dealing with the IRS.  In my experience, contacting the IRS right away to resolve the outstanding tax problems usually yields more favorable results.

When speaking with the IRS, don’t offer more information than is asked, says Bob Lukey, Enrolled Agent of Mesa, AZ.  Providing information not related to the situation allows the IRS to expand their inquiry.  Most IRS and state tax issues are time-sensitive so it may be beneficial to hire a professional.

And from Enrolled Agent Barry Fowler of Houston: Dealing with the Internal Revenue Service is a complex and stressful process.  If your tax situation has gone beyond the inability to pay and you are delinquent, representation is your best bet.  An IRS representation specialist understands the complexities of tax law.  Having a trained representative (CPA, Enrolled Agent or Tax Attorney) in your corner will help you get the best deal you are allowed by law.

Do you need help with a delinquent tax issue or IRS notice?  BookkeepingHelp.com lists professionals near you who specialize in tax problems of all kinds.  The peace of mind from using a tax problem expert should easily outweigh the costs.

Article information should not be used exclusively to make legal, financial or tax decisions. Because laws and rules can change frequently, topics may not always be updated to reflect these changes or may not apply to your unique situation. It’s prudent to seek out the advice of a professional for your specific needs.

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Category: Taxes

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