National Tax Day is quickly approaching, and many Americans are not surprised by that inevitable taxes they pay each year to the IRS. For those who owe money but can’t afford to pay, deciding how to handle the debt could settle your nerves or put you on a very expensive and anxious path.
This weeks blog, we are happy to show you some of the dos and don’ts with navigating these circumstances.
Do:
Reach out to the IRS. The IRS will not be going away anytime soon and will continue to contact you if you don’t respond to them or pay. There are many assistance links on their website at irs.gov where you can learn about all of your options. If you’d rather chat with someone on the phone about you situation, you can call the toll free number (800-829-1040). Prepare for a long wait time and only about 1 in every 50 calls actually has gotten through to a customer service representative.
Ask for a payment plan. There is an online payment plan application at irs.gov that will walk you through the steps to set up a plan. You may qualify to pay off your outstanding balance overtime. Due to the recent pandemic, the IRS did make changes including a short term payment option.
Don’ts:
Don’t join debt relief companies claiming to make deals with the IRS. Although a quick fix may be ideal, you also don’t want to be paying hundreds of dollars to a company that handled what you could do yourself by contacting the IRS. If you are that overwhelmed, we suggest talking with a tax professional about your options to steer you in the right direction.
Don’t accept a payment plan that you can’t pay. If you go online and apply to a payment plan through the IRS, they may offer a plan that is more than you can afford. You don’t have to settle for that, but you do need to get in contact with a representative at the IRS to further explain your situation. You can ask to be put in a status called “Currently Not Collectable” which flags your profile as not able to pay anything at the moment. Your debt won’t disappear, but it will give you more time to pay your living expenses and collect enough to start paying eventually.
If you have further questions about tax and other options, you can visit irs.gov for updated information as well as contacting a tax professional and the Kael Company Inc. to see what information we may have for you as well.
