IRS back taxes, need advice

yikes....I've seen those ads on TV and was wondering how they do those settlements.

Can he work out a payment plan with the IRS? I am on one and I know others that are.

No, there aren't any debtor's prisons..But we've all heard about people who went to jail for not paying the IRS!

The IRS is scary..But they will work out plans. I've seen those commercials on tv also..And they look kind of shady to me. Please tell your relative to attempt to work out a payment plan with the IRS directly..If he can get the $3000 offered to him, I would think it would be a nice gesture of good faith toward repayment. The debt is significant, but with an initial payment of that size I would think the IRS would be willing to listen.

I agree with Fins. Have your family member call them and talk to the IRS. I had back taxes that I needed to pay and went into an agreement with them, I told them how much I could pay a month and had them take the payment right out of my checking account (that way I didn't forget) They sent me a letter accepting the agreement, but that if I owe on my taxes next year that the payment will be put towards the oldest taxes owed first. They will tack on interest though. But I am making my last payment to them this month. It doesn't hurt to try and work with the IRS first, because you know that company has a nice fee tacked onto that amount.

First of all thank you, all three of you for your help. I know that the answer would have to be from someone who either owes/owed back taxes or have some knowledge of the IRS, knowledge that I do not have. Additionally, you're helping me with a family member and not myself, that means a whole lot to me!
Secondly, to clarify before I go tell him the answers, he should by pass the company that made the settlement and go directly to the IRS? sounds like going that avenue would be the most productive because unlike creditors, the irs does hire third party companies to collect their debt, but they still can be approached?
Fins...I agree with you..i think he should take the money my in laws so generously offer and put it towards his debt. hopefully that will be a good gesture in the irs's eyes.
Puddle...thank you for sharing your situation...sounds like the irs is agreeable to work with! you gave me some hope this morning. i hope that this situation is resolved...it looks to me like he just avoided the situation until it got so bad that his back is now in a corner. i'm hoping he'll take my advice and deal directly with the irs. thanks again!!!

Debt..it is in his best interest that he either makes a deal with the third party...or go directly to the IRS. They will make a settlement with you...they did with me...I'm like puddlejmpr..and they take out money each month. I could not pay originally what they wanted but I kept in touch and eventually the IRS and I agreed on an amount that fits my budget.

debtstinker-I echo the others!! We owed several diferent times to the IRS.

I spoke with them on the phone and they worked out payments with us. I though I would never get them paid off, but finally did last year. If you call them and tell them the situation and that you want to get it paid off, but can't afford the amount, they will work with you. Just be sure it is an amount that you can live with, and pay.

If you -or they- can get extra money to put down as a good faith payment and go from there, I think they will be fine- but don't ignore them!!

Best of luck to your relatives!!..karen :D

I agree! Definitely don't ignore them!

Also, make sure he is prepared..If he gets any sort of refund from the IRS they will take it until the debt is paid, regardless of any payment arrangements.

I know- one year we were going to get a big refund-after years of paying-but they took it to pay off our taxes :lol: which ended up being ok- got it paid off sooner!!..karen

I cannot add to this great advice.Do not ignore them as they can seize and levy to their heart's content without needing any court.

AMEN!! :twisted:

Debt, something doesn't seem quite right with this story.

First, the IRS will not consider what they call an "offer in compromise" unless the taxpaper has a low collection potential.

Also,Under a repayment plan, a tax-payer has 60 months to repay the taxes.

How does this Company your relative is dealing with think he can make 550.00 a month payments, if his financial situation is such he qualifies for an "offer in compromise" with the IRS.

I agree with the other opinions here.
:idea: Advise your relative to deal directly with IRS. :idea:

The IRS has an excellent web-site full of information that answers most taxpayer questions.
http://www.irs.gov/taxtopics/index.html

I echo all of this great advice and would also suggest even working with someone who is an "enrolled agent", a licensed tax preparer who has the qualifications to deal with the IRS on your behalf. I also owe back taxes and can tell you from painful personal experience that it does not pay to ignore them. It doesn't go away and it's best to file the returns and deal with it.

I know someone who owes back taxes to the IRS. She had unfortunatly hit a rough patch in her life with an old employer and she hasn't ever been able to get back to the financial standing she had. She bought a cash car and put it in her name and before you know it the IRS has now a lein on the vehicle. She had a checking account at one time and they were withdrawing funds from the account.

You don't mess around with the IRS. They are very serious. Work something out as soon as you can.

The IRS will gladly work with most people to resolve taxes. But if you ignore them, they can be like the KGB.

Hi All...again thank you for the support and advice. I'm going to tell our relative to deal directly with the IRS...Reesie...really appreciate that site! any help like that is great, need all the resources for this issue. unfortunately at this time i don't know the name of the company he is dealing with. there's lots of unknowns here and i'm hoping to get this cleared up as soon as possible. we all hope that

Here's my rant on this issue:
Now I am all for paying taxes and lord knows I have had a ton withheld this year--but why is it that a person such as myself can claim Married-0 (not even claiming myself, sportsfans, let alone my kid and disabled husband...) and STILL owe friggin' taxes?????? What is wrong with this picture?? Why can't I claim myself at least??? Just venting.....

debtstinker I have heard of cases where people are imprisoned for knowingly misrepresenting their obligations of taxes due..but haven't heard of jail time for people who didn't pay because they didn't have the $..usually they wait and then consfiscate future money..and they normally don't target individuals with no means to pay..too many people are afraid of the I.R.S..yet they are very helpful working out payment plans and if they result to putting leins on cars?...not sure what may have happened there..they are our tax representatives and are supposed to be here to help even when you haven't paid what you owe..most people get in trouble with them because they mistate what they owe or don't want to pay what they really owe..I too used to be afraid of I.R.S. until an enrolled agent as ks referred to above explained that no one should fear the I.R.S. as long as you pay what you owe or don't try to avoid obligation..you have nothing to worry about..and of course they are serious they are doing a job and have proof of any debt you might owe before going after you

I would work with the irs directly, I owe them around $1000 and they are willing to take $100 a month, they were supposed to start in October but they haven't, the ball is in there court now. I signed the papers but they have not taken any money or attempted to yet.

Fed,did you send them the first payment along with the fee for setting up the payment plan.

This is what I was told to do.

Fedup- check with them and make sure that you weren't suppossed to send them anything, like Reesie said-that's what I had to do too. Also, I paid them over the phone every month..karen :D

Hi all, Fed let us know how you are doing with your situation. the IRS is very overwhelming, i'm praying that our relative takes action immediately and contacts the IRS directly and doesn't wait and rely on this company to take action for him. will update all of you as soon as i know something as I hope others can learn from this too...all great info

kscornell, indeed I know what you mean. Back when I was married, at one point I ended up owing them close to $6000. And my salary was toward the bottom rung, I wasn't making all that much money.

I know, Lawstudent. And I am DEFINATELY not rich, but I have to say I resent not even being able to claim myself, let alone my kid during the year! I just want to break even with the IRS at the end of the year--not owe them and not get a refund. That's all I ask...

I know what you mean...I am currently making monthly payment to IRS. It is because I was working two jobs..I am a widow I have a 40 hour a week job...I have had it for 18 years but my salary is not that much...after insurance is taken out I don't get that much..also I have a small annuity from my deceased husband. I never had any left over at the end of the month I rent an apartment also. So I quit working the second job so I wouldn't have to pay the extra taxes at the end of the year....it's no win situation.

Laura....seems that way doesn't it? God bless you for doing all you can, working as much as you do and trying to make ends meet. You'll be rewarded for that...and you're an example to everyone :) hang in there

Fedup, they send you paperwork and you are supposed to send in the first payment because it takes them awhile to set up the account. But like you I didn't send it in :oops: But they just started taking out the following month and didn't say anything. It will just take you a little longer to pay it and you will have to pay another months interest. So it's no big deal. They have your info so they know they will be taking your money until it's paid anyway. In 3 days they will be taking their last payment from me :D

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I would be very leery of the company that worked out this plan. I have a very good feeling that they are scamsters.

First, the IRS doesn't generally 'settle' debt and when they do it is typically called an offer in compromise. I heard Dave Ramsey (who by the way has negotiatied with the IRS thousands of times for clients) say that in all his years he has only seen a couple work.

Second, in order for the IRS to settle with the OIC, your family member would have to be a very unique situation. No money..I mean none, no retirement savings, no equity in cars or homes, and have virtually no income. I.e. a pauper.

I think that this company is screwing with your family member and is going to end up getting your family member's money and running off with it.

There are no debtors prisons but depending upon the type of tax due, your family member can go to jail. I believe failure to remit withholding tax (the most frequent cause of tax due) is a jailable offense.

New

Hey guest, i think that he can go to jail too and i was very leery of this company. he need to deal directly as they seem reasonable, i guess they would have to be if they want their money. thanks guys

That is the best advice you can offer your relative Debt.

Not sure, but think I remember reading a topic on the IRS site that made reference to Companies that claim they can reduce your IRS bill to pennies on the dollar.

I believe the criteria to qualify for an "offer in compromise" with the IRS, is close, but even stricter than, qualifying under the new bankruptcy Laws to file a chapter 7.

Interesting! What is the Fair Tax Bill and does it mean that I will be able to claim the exemptions I legally have during the year without owing my soul to the IRS next April 15th? If so, sign me up!

Under the "Fair Tax" bill proposal, your pay-roll check would be tax FREE. :D :D You would no longer be required to file a tax return every yr. :D :D

The FairTax taxes us only on what we choose to spend on new goods or services, not on what we earn.

There would be a higher retail tax, BUT, each family according to the number of members in the family, would have so much exemption every yr. In other words, families would not have to pay a higher retail tax on necessities.


IMO, the fair tax bill would benefit everyone.

If, after doing some research on the "Fair Tax" bill, you are in favor, contact your State reps.




http://www.fairtax.org/PDF/PlainEnglishSummary_TheFairTaxAct2007.pdf

http://www.fairtax.org/PDF/FairTax-Fundamentals_and_facts-070122.pdf

Unfortunately, this is true about sending you to jail if you pass a certain threshold. The major part of it is that you immediately break the threshold when it goes in front of an administrative law judge, the person who has the power to send you to the pokey.

Interesting...this is what Steve Forbes was advocating when he ran for President???

What does a person do who has worked but hasn't had a w-2 for a few years and needs help and a job?
Where can a person go for help?

What does a person do who has worked but hasn't had a w-2 for a few years and needs help and a job?
Where can a person go for help?

Try to find a labor pool that hires day workers and pays under the table.