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You may request an automatic extension of time to pay your federal taxes by filing Form 4868 with the Internal Revenue Service. This will get you an extra six months to pay, but you will still be charged interest on your taxes owed. If you failed to file Form 4868 by April 15, however, you will need to petition the IRS to set up an installment payment plan. Although penalties will apply, the IRS will not commence collection procedures as long as you are paying installments.
If you inherited a lot of money, you may be assessed a large estate tax bill, depending on the year of death of the person from whom you inherited money. This can be particularly problematic if you inherited property rather than cash, because taxes must be paid in cash. If you request a 10-year payment plan, the IRS will consider your request after carefully examining your finances. Even if you keep up with your payments, penalties and interest will continue to accumulate.
Tax debt is one of the biggest financial problems for people in the United States today. When you owe money to the Internal Revenue Service, there are a few ways that you could potentially get out of the debt. You should be able to access an installment plan with the IRS. Some people can also qualify for an offer in compromise which is like settling the debt that you have with the IRS. Exploring all of your options is important so that you can make the best decision for your situation.
The last organization to which you want to be indebted is the government. The Internal Revenue Service has the power to garnishee wages, place liens on personal property, or at the very worst, arrest and prosecute you for nonpayment of taxes. No matter how large or small your debt to the federal government is, practical steps can be taken to minimize consequences should April 15 come, and you find yourself unable to pay your tax bill.
