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What To Do If You Owe the IRS

IRS

Come spring most Americans expect to receive a federal tax refund, while others unfortunately find out that they actually owe the IRS money.

If you receive a bill from the IRS, make sure that you do owe money. In some cases, the IRS may have made an error. Compare and check the tax return with last year’s for any discrepancies. If you believe the IRS is overbilling you, contact the IRS immediately. The best way to pay is through the IRS Direct Pay, which easily transfers money out from your checking or savings account to pay off your taxes.

If you in fact do owe money, it is crucial to pay it off as soon as you can to avoid any interest charges or late fees. Penalties for late filing begin April 16 and accumulate rather quickly. If you are two months late, the minimum penalty is either $135 or the total amount of unpaid taxes. If you’ve always been punctual paying on time, in certain cases the IRS can waive your first penalty.

Do not tell the IRS that you can not pay off your taxes. Instead, try to pay off what you can and sign up for a payment plan. You can fill out the Installment Agreement Request online if you do not owe over $50,000. In certain circumstances, the IRS will grant you additional time to pay off taxes if you request by calling 800-829-1040.

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