What To Do If You Can't Pay Your Taxes

A lot of people are facing financial difficulties at the moment and the IRS actually wants to help you if youre struggling to meet your tax obligations. You're not alone. The IRS is aware that many people may not be able to pay their taxes in full when they are due. What should you do?

First, make sure you file your tax returns. Late filing penalties have increased and are more severe than late payment penalties. To reduce penalties and interest, pay as much as you can with your return even if its just a small payment. Payments can be made by credit card, EFT, check, money order, cashiers check, or cash.

Next, evaluate your financial situation and consider the options you have to pay your taxes. The IRS will send a statement requesting payment. It is important to respond to these notices promptly. Consider your options immediately.

Payment options include requesting a 30- to 120-day payment extension, depending on the specific situation. This can give you time to recover from short term cash flow problems or to make plans to pay the tax in full by borrowing funds or liquidating assets.

Another option is a payment plan that allows you to pay the tax over a period of time. If the IRS determines that you cant afford payments now they may delay collection action on your past due taxes until your financial condition improves.

If you need help determining what course of action is best for your situation, Luers & Dyer can help you evaluate your options. With your consent we can also deal directly with the IRS to make payment arrangements on your behalf. Consult with Luers & Dyer or contact the IRS directly as soon as possible.