April 15th is just around the corner and yet there's nothing to dig into your pocket, huh? Dealing with taxes can be truly stressful and financially draining. Regardless if you have money or not, taxes must still be paid on or before the deadline. But what if you can't pay due taxes on time? Don't panic. Contrary to the frightful adjectives you frequently associate with the IRS, the agency is still lenient to assist your financial incapability.
File Tax Return
Even if you don't have sufficient earnings to pay for taxes, you still need to send your tax return. There may still be penalties for paying late, but the amount is insignificant compared to the penalties incurred by filing late.
Find Monetary Resources
Be aware that failure to pay penalty will only escalate the amount that you must pay for due taxes. You will be charged 1 percent higher of your balance due per month and up to reaching the maximum of 25 percent penalty charged.
Consider other alternatives for producing the amount you owe Uncle Sam. If possible, try to borrow money from your family or friends. If not, try cash advancing from your employer or perhaps work overtime. The least thing you can do is sell something of value to raise the cash- if you must, then do it. In addition, it is not advisable to pay unpaid taxes by swiping out your credit card with higher interest. You'll only end up paying more on interest rates- but then again, if you can and you must then do it.
Bargain on Installment Plan
Like any other finance machinery, the government can bargain on installment plan rather than not to have the money at all. The government offers options to all taxpayers when paying of taxes on time is impossible. Negotiate with the IRS amicably and suggest an amount that you can pay monthly. Fill up the Form 9465, Installment Agreement Request, and attached it to your income tax return. Make sure that you get confirmation from the IRS for your request acknowledgement and approval.
Offer in Compromise (OIC)
If you still can't come up with the amount you owe the government, you have the final option offered by the IRS called Offer in Compromise. Do not expect OIC request to be a granted immediately for this can be extremely difficult process. Also you have to complete and submit the following forms to the IRS: Form 656, Offer in Compromise, and Form 433A, Collection Information Statement.
When you file for an OIC request, it may take 1 year on average before the IRS will approve your application. You'll have to provide a thorough financial statement to the IRS including all valuable properties, income, and the debts you owe.
Whether you are able to pay due taxes or not, it is very important to fill out all necessary forms accurately to avoid the IRS audit. Regardless if you pay on time, once the IRS suspects discrepancies on your account, the IRS agents are lawfully obliged to audit your finances. Remember, IRS audit can cause you so much inconvenience. The government can further file a lien on your property to ensure payment of taxes. By paying taxes honestly and responsibly, confrontation with the IRS can be avoided.
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