Help!!!! I just found out that I owe over $4,000 to the IRS. I don’t have that kind of money. Should I just not file till I can get the money together or should I just leave the country?
Owen
Owen, I have some fairly good news for you. First of all, you should file your return. There is a severe penalty for failure to file your return by the due date. As a matter of fact, if you don’t pay you will get hit with a double penalty. Along with the failure to file you will get a failure to pay penalty. You could extend your return to October 15th but this is just an extension of time to file, not to pay so there still would be some penalties.
The fairly good news is that you can apply for an installment agreement. Since you owe less than $25,000 it is automatically accepted by the IRS. Pay what you can and then the installment agreement will allow you to pay any remaining balance in monthly installments. Since you owe less than $25,000 you may apply for a payment plan using the Online Payment Agreement application or just attach Form 9465, Installment Agreement Request, to the front of your return. You’ll need to list the amount of your proposed monthly payment and the date you wish to make your payment each month. The IRS charges $105 for setting up the agreement, or $52 if the payments are deducted directly from your bank account.
You will be required to pay interest plus a late payment penalty on the unpaid taxes for each month or part of a month after the due date that the tax is not paid, but at least you will not have to leave the country.
Remember that you also need to start planning for 2010 taxes.
Larry Kopsa CPA
