Things To Avoid If You Owe The IRS
Let’s just put it this way – if you have a lot of people you owe money to and there is the Internal Revenue Service waiting for a payment from your end too, you should care about the IRS first. While you might know of a few exceptional cases where the IRS forgives tax debts, you must never consider yourself to be one such case too. It is a rare phenomenon, and you might not be as lucky. So, you must mug up and make sure you are not doing any of the following things if you owe to the Internal Revenue System. This guide focuses on letting you know some of the typical blunders people commit when it comes to dealing with the amount they owe to the IRS. You must be proactive about such mistakes when you don’t want to end up in financial trouble.
Delay in filing taxes or not filing for taxes
Filing your taxes late makes no sense because you are going to face the charges for your delay. The Internal Revenue System makes you pay five percent of the amount you owe each month in case you are filing late.
However, if you aren’t ready to file your return, you can register for an extension before Tax Day. This extension will give you some extra time to have your return completed correctly. So, your best bet is to file your taxes without any underlying delay so that there’s no hassle heading your way. In case you can’t keep up with the given timeline for filing your return, make sure you opt for the extension in order to have some additional time in hand.
Inability to pay
Your tax bill is going to shoot up if you fail to pay. However, the charges for failure to pay are only 0.5 percent of the amount you owe to the Internal Revenue System. So, it’s only evident that even if you can’t afford to pay, you should at least file your taxes on time. This will only save you some money that you would otherwise be paying as a penalty.
The inability to pay your taxes can also turn you into a criminal and land you in jail if the matter escalates. This is precisely why one needs to be mindful when it comes to borrowing any sum from the IRS. At this point, you can’t ignore the repayment because this will inevitably cause you a ton of legal issues.
Not agreeing to a payment plans
The Internal Revenue System offers you a variety of payment plans that are aimed at helping you pay off your tax debts as quickly as possible. There are also other settlement options. However, if you are dodging these offers and payment plans, you are not making the Internal Revenue System very happy, and it is not exactly right for you. It’s advisable to pay heed to the settlement options beforehand so that you can properly chalk out how you’re going to repay the amount. You should also do money management throughout the year while keeping the repayment in mind.
Fail to compare the options for payment
However you choose to pay for your taxes, you must do it mindfully. As a taxpayer, you must consider that payment option, which is going to be comfortable for you in the long run. Don’t go for quick fixes that shake your financial stability.
There are times when the borrower has a genuine reason for failing to repay the amount they owe to the IRS. Thankfully, there are certain provisions for the same, which can be discussed with a lawyer. If you are lucky enough, the federal government might turn sweet on you, but you must have a reasonable cause like –
- Natural calamity, fire, or casualty.
- Failure in finding records.
- Severe sickness, absence, or death of the taxpayer or member of the immediate family.
The pointers above don’t get you a free pass to avoid paying taxes. They might only relieve you of the penalties. That, too, if you show up in the court with proof and documents establishing any of the reasons above. At this point, you should get along with a certified attorney who holds experience in dealing with the cases related to the IRS.
Whatever you do, don’t get scammed by unverified candidates wanting you to pay them in the name of the Internal Revenue System. If you owe to the IRS, they will let you know through clear means of communication. So, be watchful for any fraudulent individuals and seek legal assistance in order to keep yourself updated with genuine information. All in all, it becomes clear that the IRS can allow you concession if you have an appropriate cause for the same.