If you owe money to the IRS, what can you do if you don't have enough

United States
March 16, 2010 3:38pm CST
I was curious about, if you owe money to the IRS, for instance, during this year filing your tax return, you owe money to the government, and you currently don't have that much to pay it back. What can you do? Definitely you have to file the tax return as required by law. Then, would the government gives you leniency to pay it back little by little, like a loan you borrow? Would there be a high interest rate associates with it? In a scenario, you suddenly don't have income, how would you pay them back to the IRS?
6 responses
• United States
17 Mar 10
First file your return! If possible, with a partial payment. They will contact you about the balance. But if you don't file the return you will have a LARGE penalty for not filing. Someone said to file an extension, but if you file your return on time then your penalty won't be as high. If you file for an extension, then you will have some penalties to pay on the extension. The extension is actully an extension to file your return, not the payment. You are a LONG way from having to worry about them seizing your property or garnishing your wages. They WILL work with you IF you work with them. They will set up a payment plan with you. If you are thinking of trying to file for a reduced rate to pay, there are some 'catches' to that. First all of your returns have to be filled on time for the next 10years with all payments made on time. If you defalt then you will pay them EVERYTHING plus extra penalties and fees. I would not recommend this under any circumstances. Relax, File your return, and work with them.
• United States
17 Mar 10
Just want to add that the above is first hand personal Been There Done That experiance.
• Philippines
17 Mar 10
Good morning kingparker, Yes, the IRS and even the Franchise Tax Board, would allow us to make monthly payments, with minimal interest. You will have to let them know as soon as possible so you don't get penalties. I sent the IRS a small amount that I could afford and they sent me a form to fill out, which I sent back to them. When people have the desire to pay, but can't afford at the moment, they are very nice about it. But, for those who resort to tax evasion, they can be very tough.
@spalladino (17924)
• United States
17 Mar 10
First of all, you can file for an extension which will buy you some time. If you are still unable to pay then you can call the IRS and they will work with you but you will also incur penalties and interest so it's best to pay your taxes as quickly as possible.
• United States
17 Mar 10
They will work with you. Payment plans and such. Depending on how much you owe they can garnish future wages, take money from your accounts, and seize vehicles and property. There will be interest rates. They are usually pretty reasonable, but even a good rate on a large sum of money is a lot of $$. You may want to consider getting an attorney if you owe very much. You have to crunch the numbers and figure out if the amount you owe justifies legal fees.
@kittenclaus (1393)
• United States
17 Mar 10
One of my best friends owes the IRS. She and her now ex boyfriend had a masonary business. I'm not sure of all the details but the business was in her name and somehow the taxes got messed up. She went to see a lawyer who says they can get the amount lowered for her and she can make monthly payments.Thats sounds great but now she has to pay both the IRS and the lawyer. My boyfriend is always talking about how he'd like to start his own construction company, which would be fine but I'm always telling him if and when he decided to do this he has to make sure all the taxes are kept up. I know we can't afford to pay the amounts that they are charging her. She's not even working right now, so I'm pretty worried about her. She's a very good person but I think she got into the business not really knowing enough about how to run a business and all the effects it can have.
@dawnald (84146)
• Shingle Springs, California
16 Mar 10
I know somebody who files an extension every year. Problem is, you still have to pay. I suppose you could estimate low, but they'll catch up to you eventually.