You’ve completed your final tax return and realize that you owe the IRS a lot of money. The IRS understands how tough this can be during the economic downturn.
Form 1040, Income.
If you expect to have trouble paying your taxes on time, contact the IRS immediately about an IRS Payment Plan.
The IRS is not going to send you to jail if you owe them money. That being said, they do want you to pay up sooner rather than later. If you have the money to send a check along with your final return, go for it. This will put your balance due at zero, and allow you to move on with the next tax year. Of course, some people are not in position to pay their debt – a scary situation indeed, but there are options available.
When you owe money but cannot afford to pay right now you need to consider how you can settle your debt with the IRS. You may qualify for an installment agreement or offer in compromise. Both options give you the chance to pay the IRS without getting in further trouble.
So, there’s little to fear if you work with the IRS to reach compliance. Start worrying if you’ve made an effort to avoid paying. This can lead you to serious trouble. If you are honest with the IRS and find a plan that works, in the long run you will pay what you owe and find yourself in a better position.
