If you owe taxes from 2004. Will they take it out of 2006 refund?
2007-01-23 02:52:45 · 9 answers · asked by TCM 3 in Business & Finance ➔ Taxes ➔ United States
I dont mind if they do - that will take care of it. I just found out I owed it by an audit. Just curious if it has happened to anyone else this way.
2007-01-23 03:40:55 · update #1
Even if you have arranged a payment plan with the IRS, the IRS will still take your refund if you are not fully paid.
2007-01-23 03:10:55 · answer #1 · answered by jseah114 6 · 0⤊ 0⤋
The IRS will automatically deduct any outstanding balance that you owe them from any refunds you are due. There's no way round that. If you don't set up a payment agreement with the IRS expecting to wait until you file next year to pay off what you owe, two things can happen. The first is a certainty while the second is possible depending upon how quickly you file. 1. The IRS will add penalties and interest starting with the due date of the return (April 15, 2008) until the debt is paid in full. The net rate is about 10% per year but is calculated for every day that the debt is unpaid. 2. The IRS could levy your wages or bank account for the outstanding balance. They only do this if you ignore all efforts to settle the debt. The cheapest way out of this (assuming of course that you agree with their assessment; they don't always get it correct!) is to simply pay them ASAP. You can request a payment plan and start making monthly payments though there is a fee for that. If you are certain that you can pay them off in 120 days or less you can ask for an extension of time to pay. Send them whatever you can each month. IF your refund is enough to cover the unpaid balance, no harm and no foul. However if your refund is not enough to pay them in full you'll have to write them a check or get on a payment plan ASAP at that point. But before you do any of that you need to see if the IRS position is correct in the first place. If you admit that you failed to report some income and their numbers look right, just pay them. However if the IRS used incorrect assumptions -- such as $0 basis on the sale of stocks that you forgot to report on Schedule D -- then you need to prepare an amended return using the correct numbers. The IRS will then recalculate your debt and sent you an updated statement.
2016-05-24 00:48:39 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Yes, in fact any government agency that you would recieve a refund from can be required to withhold that amount to be applied to your back taxes. Agencies such as DMV, social security and even the lotto.
2007-01-23 02:59:55 · answer #3 · answered by Eric K 1 · 0⤊ 0⤋
YES they will and while they are at it they will add pentalties and interest if they think you were avoiding paying them.
DO not file rapid refund if you owed those taxes, it will just create a bigger mess
2007-01-23 02:59:00 · answer #4 · answered by kissmymiddlefinger 5 · 0⤊ 0⤋
Looks like you won't be getting your refund. Not sure why you'd think you'd still get money from people you owe.
2007-01-23 03:02:58 · answer #5 · answered by y2kguyarea51 3 · 1⤊ 1⤋
Yes they will. they will not give you a refund if you owe money.
2007-01-23 02:56:16 · answer #6 · answered by Anonymous · 1⤊ 0⤋
Without a doubt, unless you have some type of payment plan in place with them.
2007-01-23 02:56:14 · answer #7 · answered by Homeslice 4 · 0⤊ 0⤋
Yes, definitely.
2007-01-23 03:00:29 · answer #8 · answered by may s 2 · 1⤊ 0⤋
If they have their act together they will.
2007-01-23 02:55:43 · answer #9 · answered by Wayne Z 7 · 0⤊ 0⤋