How can I resolve an amount owed to the IRS with most of the amount owed being penalities and interest?

Question

My husband owed about $1800.00, The irs kept his tax return last year 1625.00, but now say he owes over 3000.00 now. We live in Georgia, do we need an attorney or what to resolve this without having to pay all the fees and interest

Answer 1

Has he ever had a penalty before? If not, he can simply call and ask for a removal of penalty for first-time abatement. If he has had, he could write the IRS and ask for an abatement of penalties and interest associated with the penalties due to whatever the "reasonable cause" was for not paying, filing, and/or depositing timely. If sustained, the IRS will send an 852C or 854C letter stating why it was sustained and give appeal procedures. Follow the appeal procedures and you have an okay chance of getting it removed or reduced. Call the IRS and dont be afraid to ask questions (1-800-829-1040 for individual tax and 1-800-829-0115 for business tax) about filing dates, extensions that may not be showing up, payment amounts and dates that have been made. Pay the penalties and interest if at all possible because the interest rate is 7% compounded daily! If, you cant pay in full, you can get up to 120 extension to pay for free, no questions asked after that an Installment agreement can be setup in about 10-15 min over the phone as well. Get a loan if possible bc it will be at a better interest rate. You may also do an Offer In Compromise (Form 656) to settle as well. Good Luck!

Answer 2

How did he go from owing $1800, then a $1600 refund was taken, then his balance skyrockets back up to $3000? Sounds like some other adjustments were made to his return. At any rate, call the IRS Collections Department and request an explanation for how the balance wnet up so drastically, then request an installment agreement.

Answer 3

The IRS had purely issued a form 8919-Uncollected Social risk-free practices and Medicare on Wages. this way helps a taxpayer who believes they at the instant are not a contractor to keep themselves the matching SS and Med. form 8919 itself is amazingly straight forward and purely asks for the corporation's advice, in spite of if a 1099Misc replaced into issued and calculates the worker's SS and Med charge to be transfered to their 1040. what isn't straight forward is the "reason code" section. for each corporation a taxpayer lists, they'd desire to become attentive to why they're applying the 8919. Have they gained a form letter from the IRS, have been they labeled as an worker in the previous yet now being taken care of as settlement labor, are others doing the same paintings being taken care of as workers? yet what if the taxpayer does not meet any of the excuses? the appropriate reason is that an SS-8 has been filed with the IRS a yet no determination letter gained. base line, if a taxpayer desires to apply form 8919 they're going to would desire to document a SS-8 and that's no elementary rely. this is a three website form asking the taxpayer to stipulate their working courting with the corporation. Who controls what; time, interest responsibilities, kit, training, and so on. it is going to likely be exciting to work out if some taxpayers be certain to pay the better tax to maintain from filling out the SS-8. the choose for form 8919 and SS-8 is to decrease the Tax hollow by using looking who would be paying workers as contractors so added study can centred the place it might do the main good. with any luck, investigations will additionally become attentive to those long term era non-filers. The taxpayers who opt to be paid "under the table" so as that they don't would desire to pay taxes like an worker does. the subject is that somebody has to start the technique by using submitting a SS-8 and that would desire to intend fallout from the corporation they became in or others in that corporation. they'd desire to be keen to be a whistleblower.

Answer 4

even if you hire an attorney you will still have to pay all the penalities and interest,IRS always gets their money.hiring a attorney will only cost you more and you will still have to pay..The best thing you can do it go to the IRS building and make up a payment plan to pay off the balance....I have dealt with them before and the only way you solve this is to go to them and face this matter.....

Answer 5

contact them and try to resolve it. You cant really escape penalties and interest. but if you dont have the money they might be willing to strike a deal. if the reason he didnt pay in the first place was for a good enough reason they may give you back the penalty portion. but the intrest in inescapable.

Answer 6

With that "small" of an amount, an "Offer In Compromise" would probably be rejected.

If you enter in to an installment agreement, the penalties will stop. This is what he should have done right away.

Answer 7

You may just want to contact them and try to resolve it yourself. You may also want to get a CPA or Accountant who specialized in this sort of thing to go with you. Sometimes a CPA could help work something out.

Answer 8

Interesting, I was wondering the same thing myself

Answer 9

Awesome question

Answer 10

they charge what they want when they want.