I am a former IRS Agent of 10 years and have practiced IRS Tax Law for over 28 years. Here are some good tax tips if you cannot pay your IRS tax debt.
My 10 Golden Tips
1. The IRS has Publication 594 – For the do-it-your-selfers, read the IRS Collection Process which talks about what to do if you cannot pay your taxes on time. It is comprehensive and thorough. An easy read.
2. If you did not file your tax returns, file them immediately. The IRS will request this before the case is worked and closed.
3. If on the unfiled tax returns you owe tax (married filing jointly), make a decision whether or not to include both husband and wife on the liability. Sometimes it is better to only have one party responsible for the tax.
4. If you owe less than $25,000, you can get a streamline agreement automatically. Just call the automated service at the IRS, 1 800 829-1040, to make the arrangements.
5. Make sure you do some asset planning before calling the IRS.
6. If you have a pension, 401K or IRA, the IRS will ask if you can liquidate it to pay the taxes. Find out beforehand if you can liquidated any of these and what are the consequences of doing so.
7. Find out whether you qualify for an Offer in Compromise. An OIC can suspend IRS collection action.
8. Make sure you are current for withholding or estimated payments in the current year of the tax problem.
9. Four million taxpayers pay their taxes using an installment agreement. Find out the criteria for a payment agreement before you call the IRS. Do not call the IRS without first having a plan.
10. If you owe payroll taxes, Form 941, the IRS will not work with you until you are current on all taxes and all tax returns are up to date, including your personal income taxes.
If you are having IRS problems make sure you call a true IRS tax professional for the best results.
