QUESTION:
I filed my 2006 taxes last week, but the amount of taxes that I owed are simply more than I can afford to pay right now. This is the first time that I have owed the IRS any money. What can I do since I don’t have enough money to pay the taxes now?
ANSWER:
Since you cannot afford to pay all of your taxes when they were due, last Tuesday, you should be warned that the IRS will apply a Failure to Pay penalty to your account. This will increase the amount of taxes you owe. The easiest way to take care of this tax debt is to set up an installment agreement with the IRS to pay the taxes off over a couple of years. My advice would be to set the installment agreement up to pay as much as you reasonably can because interest is also causing your balance due to grow. The flipside to that idea is that if you set your payment amount too high and you are unable to afford the payments, you will default and the IRS can demand that you pay your balance off immediately or they will look into other collection alternatives such as a levy on your wages or bank account. If you have a tax problem, I will be happy to talk with you about your situation and tell you how I can help. Your initial consultation is free and you will be under no obligation. The sooner you take action to solve your tax problem, the sooner you can rest easy and cease worrying about those taxes. Also, I want to let all of my readers know that I can help you with real estate, probate, domestic and personal injury matters also. If you need help with any legal matter, please call today for your free consultation.