IRS Tax Debt - What Happens If I Can"t Pay the Full Amount?
Protect your Things: Your house, vehicles, and even your bank account are forever in the sights of the IRS Collections Division.
The best thing you can do is never give them a reason to "pull the trigger.
" The people in the worst spots of IRS tax debt are the ones who roll over and take hit after hit, refusing to do anything about their debt.
These people are eventually battered until they have nothing left to give; don't let that be you.
Pick Something! The IRS offers payment plans in order to get full payment on your tax debt.
If you can't pay the full amount due, it may be a good idea to get into and Installment Agreement so that you can make payment on the debt.
But keep in mind that the IRS will want to know your current financial status.
Basically, they're going to call you and find out all of your information: where you work, where you bank, where you live, etc.
The Installment Agreement is a great way for an IRS-Hitman to get you over a barrel.
No Room for Error: Once you get yourself in an installment agreement, you must make payments every month.
The good news is that you can start paying off your debt.
The bad news is that the IRS decides how much you pay each month.
They get to pick what's "affordable" for you and if you miss a payment you will go into default.
Once you're in default, the IRS can get back to the drawing board with ways to get the money.
They can put a lien on your credit, levy your bank account or my personal favorite, garnish your wages! So make sure the IRS doesn't put you in a plan that you know you can't afford.
User Fee: There is also a user fee associated with the Installment Agreement: $105 dollars without the direct deposit option, or $52 dollars with direct deposit.
You full tax bill will be taken into account, as well as any and all penalties and interest.
In about 30 days from the application, you will know if you've been accepted into the program.
The monthly payments will be made each month until the debt is paid off or until the statue of limitations (10 years) runs out.
A Mountain of Debt: Keep in mind that during this time, penalties and interest still accrue.
So any way you slice it, you're going to be paying more than you actually owe.
But remember, the Installment Agreement is still a much better option than losing all of your things just because you don't have thousands of dollars in your back pocket.
What about my Refunds? If you are still paying down a debt from back taxes, any money coming to you via refund will be applied as payment on the debt.
This means that if you are supposed to get money, you won't even see the check.
That amount will just be deducted from your debt.
This will continue to happen for as long as the IRS deems necessary.
One More Thing: If you are currently in an Installment Agreement and you feel that you are not making any progress, there are other options available.
Speak with a tax professional about what will be the best choice for you.
Now you have the smoking gun...
Use it!
The best thing you can do is never give them a reason to "pull the trigger.
" The people in the worst spots of IRS tax debt are the ones who roll over and take hit after hit, refusing to do anything about their debt.
These people are eventually battered until they have nothing left to give; don't let that be you.
Pick Something! The IRS offers payment plans in order to get full payment on your tax debt.
If you can't pay the full amount due, it may be a good idea to get into and Installment Agreement so that you can make payment on the debt.
But keep in mind that the IRS will want to know your current financial status.
Basically, they're going to call you and find out all of your information: where you work, where you bank, where you live, etc.
The Installment Agreement is a great way for an IRS-Hitman to get you over a barrel.
No Room for Error: Once you get yourself in an installment agreement, you must make payments every month.
The good news is that you can start paying off your debt.
The bad news is that the IRS decides how much you pay each month.
They get to pick what's "affordable" for you and if you miss a payment you will go into default.
Once you're in default, the IRS can get back to the drawing board with ways to get the money.
They can put a lien on your credit, levy your bank account or my personal favorite, garnish your wages! So make sure the IRS doesn't put you in a plan that you know you can't afford.
User Fee: There is also a user fee associated with the Installment Agreement: $105 dollars without the direct deposit option, or $52 dollars with direct deposit.
You full tax bill will be taken into account, as well as any and all penalties and interest.
In about 30 days from the application, you will know if you've been accepted into the program.
The monthly payments will be made each month until the debt is paid off or until the statue of limitations (10 years) runs out.
A Mountain of Debt: Keep in mind that during this time, penalties and interest still accrue.
So any way you slice it, you're going to be paying more than you actually owe.
But remember, the Installment Agreement is still a much better option than losing all of your things just because you don't have thousands of dollars in your back pocket.
What about my Refunds? If you are still paying down a debt from back taxes, any money coming to you via refund will be applied as payment on the debt.
This means that if you are supposed to get money, you won't even see the check.
That amount will just be deducted from your debt.
This will continue to happen for as long as the IRS deems necessary.
One More Thing: If you are currently in an Installment Agreement and you feel that you are not making any progress, there are other options available.
Speak with a tax professional about what will be the best choice for you.
Now you have the smoking gun...
Use it!
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