How to pay your taxes – if you can’t pay in full: Installment Agreement (Part III)
To be eligible for an Installment Agreement, you must file all required tax returns.
Prior to approving your Installment Agreement request, the IRS may ask you to complete a Collection Information Statement (Form 433F, 433-A and/or Form 433-B) and provide proof of your financial status. If you apply over the phone or at an IRS office, have your financial information available. Bring documentation to support your dollar amounts on the form. For more information, see Publication 1854, How to Complete a Collection Information Statement (Form 433-A).
If they approve your request, they will still charge applicable interest and penalties until you pay the balance due in full and may file a Notice of Federal Tax Lien.
If the IRS rejects your Installment Agreement request, you may request that the Office of Appeals review your case. For more information, see Publication 1660, Collection Appeal Rights.
If you’re unable to meet the terms of your approved Installment Agreement, contact the IRS immediately.
Next week – If you can’t pay in full – apply for an Offer in Compromise
(IRS Publication 594 and IRS.gov) (TTT 09/10/19)
How to pay your taxes – if you can’t pay in full: Installment Agreement (Part II)
If you request a payment plan online you will receive immediate notification if your agreement is approved. If you request a payment plan by mail, you can reduce the accrual of penalties and interest by making voluntary payments until you’re notified whether they have accepted your payment plan request. The IRS acceptance of your interim payments doesn’t mean they have approved your request. The IRS will notify you in writing once they have made their decision.
With an Installment Agreement, you can pay by:
· direct debit,
· through payroll deductions,
· electronic funds transfer, or
The setup fee is reduced if you make your payments by direct debit. You can also pay a reduced user fee if you meet their low-income guidelines. The reduced fee can even be waived completely or reimbursed if you meet the IRS low-income guidelines. For more information, see Form 13844, Application for Reduced User Fee for Installment Agreements. You do not need to submit the user fee with your installment agreement application. The fee can be taken from the initial payments made once the installment agreement is accepted.
Next week – Additional information on eligibility for an IRS Installment Agreement
(IRS Publication 594 and IRS.gov) (TTT 09/03/19)
How to pay your taxes – if you can’t pay in full: Installment Agreement (Part I)
An Installment Agreement (or payment plan) with the IRS means that they will allow you to make smaller periodic payments over time if you can’t pay the full amount at once. A setup fee applies to all agreements over 120 days. There are several ways to apply for an Installment Agreement:
(1) Online, using the Online Payment Agreement application at www.irs.gov/OPA. You can apply online for a reduced setup fee if the total combined balance of individual income tax, penalty and interest you owe is $50,000 or less. Short-term payment plans of 120-days or less and monthly installment agreements are available. If you own a business and owe $25,000 or less in combined payroll taxes, penalty and interest for the current and prior calendar year, you can also use the Online Payment Agreement to request an installment agreement. To view an instructional video on the Online Payment Agreement application, visit Online Payment Agreement.
(2) By phone Please call the number on your IRS bill or 1-800-829-1040.
(3) By mail Please complete Form 9465, Installment Agreement Request. In addition to Form 9465, if you want to make your payments by payroll deduction, complete Form 2159, Payroll Deduction Agreement. If you owe more than $50,000, you will also need to complete Form 433F, Collection Information Statement. Mail your form to the address on your bill.
(4) In person at your local IRS office near you, please visit www.irs. gov/localcontacts.
Next week – Additional information on an IRS Installment Agreement
(IRS Publication 594 and IRS.gov) (TTT 08/27/19)
Ways to Pay Your Taxes – Options to pay in full
To minimize interest and penalties, the IRS (and we do, too) recommend paying your taxes in full. However, if you’re unable to pay in full, you can request an Installment Agreement or Offer in Compromise. These payment plans allow you to pay your taxes in installments over time, to pay less than you owe, or both. It’s also important to stay current on your payments for future taxes. This means making your estimated tax payments, withholding payments, or federal tax deposits as required by law.
Options for paying in full (To explore all of your payment options visit IRS.gov/payments.)
· Electronic payments
· IRS Direct Pay
· Debit or credit card
· Electronic Federal Tax Payment System
· Pay by mail or visit the IRS in person at a local IRS office
Next week – how to pay your taxes – if you can’t pay in full
(IRS Publication 594 and IRS.gov) (TTT 08/20/19
How the Low-Income Taxpayer Clinics and license tax professional can help. (Part IV)
Low Income Taxpayer Clinics
Assistance can be obtained from individuals and organizations that are independent from the IRS. IRS Publication 4134, provides a listing of Low Income Taxpayer Clinic List (LITCs) and is available at www.irs.gov. Also, see the LITC page at www.taxpayeradvocate. irs.gov/litcmap. Assistance may also be available from a referral system operated by a state bar association, a state or local society of accountants or enrolled agents or another nonprofit tax professional organization. The decision to obtain assistance from any of these individuals and organizations will not result in the IRS giving preferential treatment in the handling of the issue, dispute or problem. You don’t need to seek assistance to contact them. They will be pleased to deal with you directly and help you resolve your situation.
Here are ten tips for taxpayers to remember when selecting a preparer:
1. Check the Preparer’s Qualifications.
2. Check the Preparer’s History.
3. Ask about Service Fees.
4. Ask to E-File.
5. Make Sure the Preparer is Available.
6. Provide Records and Receipts.
7. Never Sign a Blank Return.
8. Review Before Signing.
9. Ensure the Preparer Signs and Includes Their PTIN. 10. Report Abusive Tax Preparers to the IRS. (Use Form 14157, Complaint: Tax Return Preparer.)
Next week – how to pay your taxes.
(IRS Publication 594 and IRS.gov) (TTT 08/13/19)
Who do I contact if I need help dealing with the bill from the IRS? (Part III)
You can find help at the Internal Revenue Service, Taxpayer Advocate Service, Low Income Taxpayer Clinics (if eligible), or/and a license tax professional – Certified Public Accountant, Enrolled Agent, or an Attorney.
Internal Revenue Service The IRS web site (www.irs.gov) has many free resources. It should be your first stop for help. You can find answers with the Interactive Tax Assistant at IRS.gov/ITA. You can also call them with any questions you may have. Call the number on your bill or 1-800-829-1040. There may be a wait time before reaching someone so plan accordingly. Another option is to visit your local IRS office to speak with an IRS representative in person (an appointment may be required).
Taxpayer Advocate Service
The Taxpayer Advocate Service (TAS) is an independent organization within the Internal Revenue Service that helps taxpayers and protects taxpayer rights. They help taxpayers whose problems with the IRS are causing financial difficulties, who’ve tried but have not been able to resolve their problems with the IRS, or believe an IRS system or procedure isn’t working as it should. Their service is free. Your local advocate’s number is at taxpayeradvocate.irs.gov and in your local directory. You can also call them at 1-877-777-4778. For more information about TAS and your rights under the Taxpayer Bill of Rights, go to taxpayeradvocate.irs.gov.
Next week – We will briefly explain how the Low-Income Taxpayer Clinics and license tax professional can help.
(IRS Publication 594) (TTT 08/06/19)
What Should I do when I receive a bill from the IRS and I disagree…? (Part II)
If you disagree with the information on the bill, call the number on it, or visit your local Internal Revenue Service (IRS) office. (Appointment may be required.) Be sure to have a copy of the bill and any tax returns, cancelled checks, or other records that will help the IRS agent understand why you believe your bill is wrong. If they find that you’re right, the agent will adjust your account and, if necessary, send a revised bill.
If you don’t pay the amount due or tell the IRS why you disagree with it, they may take collection actions.
If you are in bankruptcy, please notify the IRS immediately. The bankruptcy may not eliminate your tax debt, but they may temporarily stop collection. Call the number on your bill or 1-800-973-0424. Have the following information available: the location of court, bankruptcy date, chapter and bankruptcy number.
Next week – who do I contact if I need help?
(IRS Publication 594) (TTT 07/30/19
What Should I do when I receive a bill from the IRS? (Part I)
If you agree with the information on the Internal Revenue Service (IRS) bill, pay the full amount before the due date.
If you can’t pay the full amount due, pay as much as you can and visit www.irs.gov/payments to consider their online payment options.
The IRS online payment options include the Online Payment Agreement application which allows you to set up an installment agreement online.
If you do not qualify for their online payment options, immediately contact the IRS by calling the telephone number on your bill to explain your situation. You should have your financial information available, including your monthly income and expenses. (IRS Form 433F may be helpful.) Based on your ability to pay, they may provide you with alternate payment options such as setting up an installment agreement online.
Next week – what to do if I disagree or forget to answer???
(IRS Publication 594) (TTT 07/23/19)
What happens when I file my taxes and I owe the government?
1. If you owe taxes, the Internal Revenue Service (IRS) will send you a bill. This is your first bill for tax due. Based on your return, they will calculate how much tax you owe, plus any interest and penalties.
2. If you don’t pay your first bill, the IRS will send you at least one more bill. Remember, interest and penalties continue to accrue until you’ve paid your full amount due.
3. If you still don’t pay after you receive your final bill, the IRS will begin collection actions. Collection actions can range from applying your subsequent tax year refunds to tax due (until paid in full) to seizing your property and assets. This could include an unannounced visit from a Revenue Officer to your home or business.
(IRS Publication 594) (TTT 07/16/19)
Office of Appeals – Hearing available Under Collection Appeals Program (CAP) (Part XIII):
Help if you are experiencing economic harm…
The Taxpayer Advocate Service (TAS) helps taxpayers whose problems with the IRS are causing financial difficulties; who have tried but haven’t been able to resolve their problems with the IRS; and those who believe an IRS system or procedure is not working as it should.
If you believe you are eligible for TAS assistance, you can reach TAS by calling the TAS toll-free number at 1-877-777-4778 or TTY/TDD 1-800-829-4059. For more information, go to www.irs.gov/advocate.
TAS cannot extend the time you have to request a CDP, equivalent or CAP hearing. The timeframes for requesting these hearings are explained in Publication 1660 and in our various Tax Tips.
(IRS Publication 1660) (TTT 07/09/19)