What to do if you can’t pay your taxes

by News Guy on March 2, 2013

Every year, a lot of people get into trouble with the IRS. Unfortunately, a lot of people who get into trouble with the IRS think the problem will go away without doing anything. Though the Internal Revenue Service can be hard to deal with; when a taxpayer has a problem they can receive assistance when they work with the agency. Here is what a taxpayer should do if they cannot pay their taxes in a timely matter, it’s called tax relief!

Ideally, a taxpayer should find alternative ways to pay the taxes. One can borrow money from a family member or pay taxes with a credit card. Though it may be annoying to put taxes on a credit card, it beats the alternative. When owing a small amount, a taxpayer should come up with an easy solution as the IRS accepts multiple forms of payment.

If the amount is more than a few hundred dollars, it would be best to take out a loan. Most banks and lending institutions will give small loans with ease. When obtaining a loan from a credit union or bank, a borrower can expect to pay around ten percent interest. Ideally, a borrower would pay off their loan in less than a year in order to avoid spending a lot of money servicing the loan.

When a taxpayer owes more than $1,000, the taxpayer should ask to pay in installments. The IRS will work with most taxpayers, and it should not be difficult to pay via payment plan. One must keep in mind; the Internal Revenue Service will charge a small fee of $52 to pay in installments. If one pays in installments via direct withdrawal, the fee rises to $104.

Some taxpayers cannot pay their taxes for a number of reasons. Luckily, the IRS allows the taxpayer to ask for a delay in paying their tax obligations. When asking to delay paying to pay taxes, a taxpayer should ask as far in advance as possible. Usually, when asking for a delay, a taxpayer should have a solid reason to do so. Other taxpayers can apply for an offer in compromise; with an offer in compromise, a taxpayer can pay less than the full amount that they owe to the IRS.

One must realize; tax problems will not disappear. When dealing with the IRS, one should take a lot of notes and send everything via certified mail. Unfortunately, a lot of people simply ignore IRS problems as they are afraid to deal with the issues. The IRS is not as difficult to deal with as most people think, though it is crucial to start the process as soon as possible.

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