Payment Plan Option With The IRS

January 26, 2011 by  Filed under: Taxes 

Can’t pay your income tax since you’re short of cash? No problem! The Internal Revenue Service (IRS) can help you. It has several payment options that will take the pain out of paying taxes. Being low on cash is no longer an issue as long as you take advantage of these options.

Even if you can’t pay now, just be sure to file your income tax return on time. This will help you avoid the monthly five percent penalty that’s slapped on your balance. Filing won’t exempt you from being penalized but it will be sweeter at only 0.5 percent of the amount you owe.

If you have a credit card, now is a good time to use it. Official Payments and Link2Gov are ready to handle credit card payments either through the phone or the Internet. You can pay with American Express, Discover, MasterCard or VISA. But if you don’t pay off your credit card in full, be to start paying interest charges. So before paying with plastic, be sure that Uncle Sam or your credit card company won’t eat up your money.

If your tax bill is too large for your credit card to handle, know that the IRS will accept monthly payments. You can even choose how much you’ll pay every month and when to pay. More good news – if you’ve previously filed and paid taxes on time, your tax bill is less than $10,000, and you don’t have the dough, you can pay what you owe in installment and the IRS can’t turn you down. However, you are obligated to pay the entire amount in three years. To do this, attach Form 9465 (Installment Agreement Request) to your tax return.

Financially challenged taxpayers can likewise use an installment plan to make partial payments of tax liability. This was previously allowed until 1998 when an IRS attorney questioned the IRS’ authority to accept such payments without statutory authority. Fortunately, Congress gave the IRS the power to resume partial payment installment agreements based on the American Jobs Creation Act of 2004.

So there you have it – easy ways to pay your taxes and sleep better.

If you are facing an IRS audit or have other tax problems, contact the experts at Guardian Tax Resolutions today by visiting GuardianTaxResolutions.com for a free consultation and quote.

Article Source:

http://EzineArticles.com/?expert=Mark_R_Randall

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