what do i do if i have $6000 worth of taxes on savings bonds and i don't have even $20 to spare to the irs?

Question

If I don't report this on my taxes will the IRS find out and if they do what will happen if they find out i didn't file it? I just don't know what to do right now as I didn't know i was going to have to pay taxes on savings bonds. I don't have no money at all to spare a month to the IRS as i just got a new car and student loans to pay off. I hope someone can help me with this matter. THanks, Justin

Answer 1

Something seems odd. $6000 in taxes for nothing but interest on Savings Bonds is a lot. That means, you would have had roughly $38,000 of taxable income or $47,000 of adjusted gross income (assuming you didn't write off any of your college expenses nor had any dependents). $47,000 of interest would mean you cashed anywhere between $60,000 and $120,000+ of savings bonds (cash value). You spent all of that on cars and student loans? Wow. And you aren't working? So, you are still in school? Why did you pay your low interest loans off while still in school? Why did you leave yourself so short? Always keep a few months of expenses in an emergency account.

You are best off paying whatever you can on April 17th along with your tax return. Ask the IRS for permission to pay installments. The form is 9465. You will still pay interest on the money you owe, but it won't be as bad as paying interest PLUS penalties.

See the links I have below:

Answer 2

If the value of the savings bonds were $6000 (not the TAX, but the amount you actually got when you cashed them in) then your tax shouldn't be that high unless you made a ton of money. If you are a student I doubt that is the case. Go to turbotax.com or a site similar to it and just do a test run entering your info and see what it says you will owe. It could be less than you think.

If you are really saying the tax alone on your savings bonds was $6000 well then... I'd want you to introduce me to the person that gave you the bonds!

Answer 3

Are you sure you are a student at a reputable college. If you would just reread you question and statement you might be able to see that it is either far fetched, stupid or your just really naive about adulthood and how the IRS works.
HEY YOU JUSTIN, THE I.R.S. WILL TAKE your CAR, anything of value, freeze your account and garnish your wages until it's paid for. Make us all proud and claim your savings bonds (I'm surprised they haven't already caught you) and pay your dues, better now than later.

Answer 4

Yes, they'll find out. It might take a month or might take a couple years before they get around to you, but you'll owe not just the initial taxes, but also interest and possible penalties.

What you need to do is file your tax return properly, including the income. If you don't send a check for what you owe, they'll bill you. You'll be able to set up a payment plan with them to pay it off over time, with interest of course, but at least you won't get hit with penalties.

Answer 5

what a sad story, you have a new car and can't afford to pay your taxes. Yes they will find out. Sell your damn car and get a used one so you have some ability to make monthly payments to IRS. And file the return on time, the penalty for late filing is 5% per month for up to 5 months, plus other penalties and interest.

Answer 6

File the return on time and enclose a letter stating you are unable to pay the taxes that are due. You wish to have a payment plan made up for you and enclose your telephone #'s so someone can reach you.

Answer 7

There is no capital gains tax on Series EE Savings Bonds. On Series EE Savings bonds, you pay only regular federal income tax. No state tax, and no capital gains tax.