past due taxes

Submitted by tawana1956 on Fri, 02/01/2008 - 21:17

I posted this question but can't find it or if its been resolved so sorry for the repeat. My question was has anyone had any dealings with a tax repair company, the ones that claim to help you settle for pennies on the dollar for taxes you owe?

I haven't, but I believe they help you by filling out an Offer in Compromise.

Sat, 02/02/2008 - 00:19 Permalink

I owe the irs a little bit of money, they worked out a payment plan for me, I have been paying monthly on it. They take the amount that I specified right out of my checking account.

I don't know that it would be written off as bad debt if I would have called one of those companies and I think that it is for higher amounts of debt. How much do you owe them? My original debt was right around $1700, I pay around $150 a month, it has worked out well for me. So you may want to call them or write them and see if you can work out something directly with the irs. Thing is they have the power to attach just about anything so I would try to get this taken care of as soon as possible.

Sat, 02/02/2008 - 16:13 Permalink

if you dont work something out they most likely will garnish your wages.

Sat, 02/02/2008 - 23:03 Permalink

Since most of those tax settlement companies are attorneys I would definately ask them first how it will affect your credit. As August said I'm sure you don't want it showing on your credit as a written off debt whereas if you work directly with the IRS I'm sure you won't have to deal with this concern.

something worth while to look into though thats for sure. It could possibly save you a lot of money depending on how much you owe.

Mon, 02/04/2008 - 04:31 Permalink

are you able to make payments? I f so call the irs but dont make agreements with them you cant keep. they dont like you wasteing thier time.

Mon, 02/04/2008 - 17:32 Permalink

Call them up and make a payment arrangement with them.



Topic 202 - Tax Payment Options

There are various options for payment of an outstanding federal income tax liability. Since your balance is subject to interest and monthly late payment penalty, it is in your best interest to pay in full as soon as you can to minimize the additional charges. Penalties are also assessed for failure to file a tax return so you must file even if you cannot pay your balance immediately.

You may pay your tax liability electronically or by sending a check or money order, made out to "United States Treasury". If you cannot pay in full you may pay any lesser amount you are able to. Please see Topic 158 for information to include to ensure that your payment is credited properly.

You should consider financing the full payment of your tax liability through loans, such as a home equity loan from a financial institute or credit card. The interest rate a bank charges is usually lower than the combination of interest and penalties imposed by the Internal Revenue Code. If you cannot pay in full immediately, the IRS offers short-term administrative extensions of time to pay in full from 10 to 120 days.

Installment Agreements
An installment agreement would allow you to make a series of monthly payments over time. The IRS offers various payment options such as:

Direct Debit from your bank account,
Payroll Deduction from your employer, or
Payment via check or money order.

A one-time installment agreement fee of $105 will be charged when you enter into an installment agreement unless you choose to pay through a Direct Debit from your bank account, in which case the fee is $52.00. Taxpayers with income at or below 250% of the Department of Health and Human Services poverty guidelines can apply to pay a reduced user fee of $43.

Please note: The user fee for restructuring or reinstating an established installment agreement is $45 regardless of income levels or method of payment.

If you can pay your balance in a shorter period of time, you can request an administrative extension of time to pay (up to 120 days). This payment arrangement does not carry a fee.

You may also request a statutory extension of time to pay tax for up to 6 months if you show that it will cause you undue hardship to pay the tax on the date it is due. Undue hardship means more than inconvenience. You must show that you will have substantial financial loss if you pay your tax on the due date. You will need to submit Form 1127 (PDF), Application for Extension of Time for Payment of Tax, a complete statement of all your assets and liabilities at the end of last month; and an itemized list of money you received and spent for three months before you requested this extension.

If you decide on entering into an installment agreement, your monthly payment should be based on your ability to pay and should be an amount that can be paid each month to avoid defaulting.

Direct debit or payroll deduction installment agreements provide an opportunity to make timely payments automatically and reduce the possibility of default.

To request an installment agreement, when you are filing a tax return for which you are not able to provide full payment , you may submit Form 9465 (PDF), Installment Agreement Request, or a written request for a payment plan, attached to the front of your return.
To request an installment agreement after your return has been filed and you have been billed (you received an IRS balance due notice), you can use the Online Payment Agreement (OPA) application or you may submit Form 9465 or your own written request for a payment plan, attached to the front of your return or bill.

You will need to specify the amount you can pay and the day (1st-28th) you wish to make your payment each month. The IRS will expect to receive the payment ON the day you indicate so be sure to figure time into your date for mail. The IRS will respond to your request, usually within 30 days, to advise you as to whether your request has been approved, denied or more information is needed.

For a direct debit installment agreement you will need to provide your checking account number and your bank routing number to initiate the automated withdrawal of the payment.

You may contact the IRS by phone or in person, or you may submit Form 9465 (PDF), Installment Agreement Request, through the mail. The form has space for you to write your checking account number and your bank routing number. However, if you choose to do so, you may staple a voided check to the form.

To initiate a payroll deduction installment agreement, submit Form 2159, Payroll Deduction Agreement. Form 2159 must be completed by your employer. IRS will set up a regular installment agreement for you and convert it to a payroll deduction agreement upon receipt of the completed form from your employer.

For more information about installment agreements, please see and enter the keyword "installment agreement".

Responding to your IRS Notice
It is important not to ignore an IRS notice. If you do not full pay your tax liability or make an alternative payment arrangement, the IRS is entitled to take collection action. You may refer to Topic 201 for information about "The Collection Process".

If you are unable to make any payment at this time, please have financial information available (i.e., pay stubs, lease or rental agreement, mortgage statements, car lease/loan, utilities) and call:

Individual taxpayers may call 1-800-829-1040
Business taxpayers may call 1-800-829-4933 to receive assistance.

You have rights and protections throughout the collection process. If you would like some printed information on "your rights as a taxpayer," making arrangements to pay your bill, installment agreements, and what happens when you take no action to pay, refer to Publication 594 (PDF), The IRS Collection Process, and Publication 1, Your Rights as a Taxpayer.

Wed, 02/06/2008 - 01:33 Permalink

That is great suggestion. I know I had to do that in the past to help with my debt problems. They are just happy to get money.

Thu, 02/07/2008 - 16:59 Permalink

I think a lot of people fear the irs or think they are they are the bad guys, reality is they are just doing their job try to collect what is owed. They will work with you on a descent payment arrangement that will suit both parties. They are the most powerful agency in the world and the most feared by criminals, they took down mafia members when no one else could, but when it comes to the working man, they will be descnet and work with you.

Thu, 02/07/2008 - 23:38 Permalink

Hi all, Just wanted to say thanks for all the response, I'm sorry it took so long for me to get back and say thanks but did not originally bookmark the site (duh me!!) so I had a heck of a time finding it. I had a payment agreement with the IRS but we owe in the neighborhood of 25000, and it was going nowhere on what we could afford to pay. We finally decided to hire 411 Tax Relief after checking them out with the BBB but have paid them and still waiting for results! They requested information which I sent them. They were supposed to do my taxes as part of the fee and here it is 4/14 and they have not started. Each time I call the person I talk to tells me that I need to get my taxes done!!! Soooooo I'm already not happy. They did a Power of Attorney which I guess has kept the IRS from contacting me directly in the past 3 months but that is all I've seen from them so far. :x If its okay though I will update as we go, in the hopes of helping others.

Thanks again for your help and insight. This website and everyone here is awesome! I hope someday to actually be a contributor instead of receiver.

I am thinking of doing the validation letters but have seen different parts of information in different threads. Is there somewhere I can go that will "lead me by the hand" so to speak. I can write the letter but then what do I do, how long do I wait, what do I do next, etc etc. etc.

Mon, 04/14/2008 - 05:16 Permalink

True I don't think the IRS would look to keenly on a debt validation letter. I have known different people that have owed them. All they need is some type of reasonable payment schedule to make them (and yoU)happy. You will better the sooner you get this worked out. You don't want this to lead to garnishment.

Sun, 04/27/2008 - 02:44 Permalink