By Matt Robinson

Owing the IRS money can weigh on your mind. Even if you do not have the cash to pay your unpaid taxes, you must still look around for a solution. The IRS is not going to let you slide for very long. And if they do, they will be charging you penalties and interest along the way. Do you really want to add more money to your balance? Probably not.

There are many ways to satisfy your tax debt even if you cannot afford to pay all at once with a single cash installment.

Do you have a credit card? The IRS allows you to pay your unpaid taxes with an American Express, Discover, MasterCard or Visa. For some, this is the best thing imaginable. They can get out of hot water with the IRS, and simply pay off their credit card bill over the course of many months. If you want to take advantage of this option you will need to use one of the following services: Link2Gov Corporation or Official Payments Corporation. Either way, you can pay your unpaid taxes with a credit card instead of cash.

What about borrowing money from friends and/or family? This is often times the best way to get the money you need to pay the IRS. The reason this is a good idea is because you can usually avoid interest. Obviously, it makes most sense to find a family member or friend who will lend you the money and not charge interest on its return.This is only a good option if you feel you will be able to pay them back in a very short period of time. The IRS does offer better alternatives so if you feel you won't have the money right away it is best to keep your family and friends away from your financial problems.

The most common solution to paying your taxes back if you can't pay is through an installment agreement. This is typically a better option than paying on credit cards because the interest that the IRS charges you once you enter into an installment agreement is typically less than what most credit card companies will charge you on outstanding balances. An installment agreement will allow you to pay back the taxes you owe in monthly payments. As long as you consistently pay your installment payment you will be considered in good standing with the IRS. If you cannot meet the required minimum payments for an installment agreement it likely that you would be considered for other payment options offered by the IRS.

An offer in compromise is a way for taxpayers to settle their taxes owed for less than the total amount. This option is only available to those taxpayers that are unlikely to ever pay off the outstanding tax balance. An offer in compromise is a complex tax filing and will likely require a tax relief professional to handle the filing. In this filing you will be required to make the IRS an offer that is equal to or greater than the amount that the IRS would ever expect to collect from you. If the offer you make is less than what the IRS thinks it can collect from you then it is likely they will reject, so you can see why you will need a tax professional to handle this calculation.

If you cannot pay unpaid taxes to the IRS you need to consider all your options. They include using a credit card, borrowing from friends and/or family, or using an installment agreement or offer in compromise. Hopefully one of these will allow you to pay your unpaid taxes despite the fact that you are short on cash.

About the Author: Find out details on your options if you are unable to pay taxes. Our site contains detailed information on various tax filings and connections to tax professionals that can help.

Source: www.isnare.com
Permanent Link: http://www.isnare.com/?aid=471895&ca=Finances

 

 

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