So like.. let's say hypothetically you were to owe a lot of tax for last April - more than you can afford to pay in one shot.. nor even in a timely manner. Does the IRS have any sorta "payment plan" or something that they'll work out?
funny but seriously they do...call 1-800-tax-1040 and keep selecting topics...you will eventually hear "if you cannot pay the whole amount" or something like that.
There are also tax-payer advocates in larger cities who assist people whose tax liabilities overwhelm them...I know one person who is addicted to gambling...well too bad for her she won a big jackpot last year, and then this year before April she managed to loose it all...combine that with other stupid financial moves like getting fired from her job and she had huge loans against her 401K which she could not pay back so they became taxable income (theoretical income--of course she had lost the money a long time ago) so she ended up owing the IRS big time....a tax payer advocate helped her settle the amount to 20% of what she owed...taxes cannot be dismissed in bankruptcy until they the money you owe for tax years is 3 or 4 years, I'm not sure what--all I know if you owe taxes for 2002 you cant get rid of them by filing for bankruptcy
the irs is actually pretty lenient. i took two years to pay taxes once. the State of Calif. is way different. I had about 4 months until they were ready to garnishee my wages. if yer really poor, you can also try and offer in compromise. basically, the irs will take the greater of your net worth or the taxes owed. hence, if your net worth is LESS than your tax bill, you can avoid paying the excess.
If you got the money in the bank or stuffs like that, they want to get paid. If you're broke and ain't got a nickle, they'll be glad to make you promise to pay on installment. If you're near death bed, they'll be nice and forget about it by you paying a tiny sum. If you're still raking it in, you ain't got a prayer nor a pot to pizz in. Cough it up so that this country can still pay for the war effort.
Very funny, Ken - actually I'm making a nice salary now and still negotiated through paperwork a 10-year payment plan. At this point I could pay it off in a few months' time, but I can now afford to wait until I'm good & ready. It was pretty easy to set up, and the payment is low because of the long term. I hope to pay it off very quickly though because I don't like owing money!
Sean, it was a win-win situation with you agreeing to the amount owed and paying them on installments in full with interest. That protects their accounts receivable. The rates not bad now, stretch it out. You're fortunate in that they won't be reviewing and accelerating the payments, now that you're "making a nice salary." Back then you convinced them to wait in installments. Did you have to pay the huge application fee?
Lucky you, it's like 300% increase nowadays. You got the cheap lottery ticket.
Was there a provision in your agreement that allows them to later review and alter the terms of future installment payments? Like your financial situation improving or deteriorating? What if you hit a million dollar lottery winning? You still can string it out to 10 years?