I owe back taxes
Do you owe back taxes? The answer is simple,
and you probably already know it: pay up as soon as you can.
Don’t have the money? Don’t worry; you’ve
still got options.
If you owe back taxes, the IRS will charge
you both interest and penalties for each day that you haven’t
paid your debt. Consider taking out a bank or a credit card
loan to pay it off—you’ll still be paying interest,
but you won’t have to deal with the penalties.
Offer in compromise
An offer in compromise (OIC) is an agreement
between a taxpayer and the IRS that resolves the taxpayer’s
tax debt. If you can get an OIC, that’s great—but
keep in mind that the IRS resolves less than one percent of
its balance due accounts through the OIC program. And watch
out for con artists who offer to file an OIC application on
your behalf in exchange for a fee. Chances are, they won’t
be able to deliver on their promises, and you’ll be left
owing even more money.
Payment plans may sound like a good idea;
after all, you’ll be making smaller, more manageable payments
that are based on the amount that you owe. But the IRS will
still charge you both interest and penalties, so you’ll
actually end up paying a lot more. If you pay off your tax debt
quickly as possible, you can save thousands of dollars.
Want more information on back tax payment
options? Call me for a free consultation.