QUESTION: I filed my 2007 tax return on October 15, 2008 and I owed $50,000.  I don’t have the money to pay any of my taxes with my return.  What will happen when the IRS receives my tax return.  Will they immediately come take my house?

ANSWER:  If you filed an extension, your tax return was due on October 15; however, the actual payment was due on April 15 this year, so your tax payment is already late.  The IRS will process your tax return and send you a notice in a few weeks that tells you the tax, penalties, and interest that have been assessed against you.  Then you will need to begin working out some way to resolve your tax liability.  You may receive some threatening collection letters if you wait too long, so I would encourage you to begin the process or working out your problems earlier, rather than later.  There are several ways to settle your IRS problems.  You can either enter into an offer in compromise with the IRS where you settle your liability for a lesser amount or you may have to set up an installment agreement where you pay your taxes each month, similar to a mortgage on a home.