Avoid IRS Penalties and Interest
The best way to avoid IRS penalties and interest is to make sure that you pay your taxes on time. The deadline for payment is April 15th every year. When you find that, you are not able to make the payment then request an extension. The IRS will allow you an extension without giving you any penalties or interest fees. The extension to file your taxes is usually a short period and if you do not get your filing completed by that time then the IRS will access fines.
The best way to handle the IRS and avoid getting fines is to file your taxes on time and ask for an extension on paying your taxes or a tax payment plan. The IRS will allow you to make a payment arrangement on your taxes. You will then need to pay the taxes by mail or you can set up an online account with the IRS and pay over the internet. You are allowed to pay through your bank account, credit card, or a debit card. If you select to pay by mail, you should send your check or money order to the IRS with the Form 1040V.
Military Tax Payers
Those who are in the military are expected to pay their taxes on time just like everyone else. The government will allow you an extension on filing your taxes if you are not in the country. The extension that the IRS allows comes without any penalties or interest fees. Those who are in a war zone are permitted to file their IRS taxes 180 days after they have left the zone. Victims in the United States who have been affected by natural disasters are also given an extension on filing taxes without having to pay any fines.
Request Payment Arrangements
When you know that you do not have enough money to meet your tax payment requirements then you can request an installment agreement. The IRS will set up a monthly payment arrangement but you will have to pay interest. Most of the time if you make the installment arrangement without being late on your taxes the IRS will not charge you any fines or penalties. In order to make the arrangement you should include Form 9465, which is an Installment Agreement Request. There is a fee for this agreement and it is as follows:
. IRS setup rate is $105.00
. IRS fee if deducted from your bank account $52.00
. If you are in lower income the fee is $43.00
. You can go online, set up EFTPS arrangements, and pay the IRS each month free.
Offers in Compromise -IRS Payment Option
Congress has set up a program, which is called the Offers in Compromise. The agents who handle your account must determine if you are not able to pay the whole tax bill. If they determine that your circumstances is such that you cannot afford to pay the whole amount of taxes then your tax amount will be reduced to enable you to meet your tax obligations. It is difficult to deal with the IRS yourself. It is best that you get an IRS tax lawyer to help you with the procedure. Many people have been able to reduce their taxes to the point of only paying about 10%. In order to get the best deal with an IRS tax agent it is advisable that you use your IRS tax lawyer.
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