I owe the irs around 1200 bucks, whats the risk? can I go to jail if I dont pay? it has been a year since.....

Question

I owe that, because a miscalculation in my tax return, whats the risk?

Answer 1

If you cannot full pay your tax liability in a lump sum, the IRS offers a payment by installment option. An installment agreement would allow you to make a series of payments over time. Installment agreements may be set up in various ways:

Direct Debit from your bank account,
Payroll Deduction from your employer or
Regular Installment Agreement
If you enter into an installment agreement, your payment amount should be based on your ability to pay and should be an amount that can be maintained over the duration of the installment agreement.

Direct debit or payroll deduction installment agreements provide an opportunity to make timely payments automatically, and therefore, these payment methods reduce the possibility of defaulting your agreement.

To request an installment agreement, when you are filing a tax return for which you are not able to provide full payment , you may submit Form 9465 (PDF), Installment Agreement Request, or your own written request for a payment plan, attached to the front of your return.
To request an installment agreement after your return has been filed and you have been billed (you received an IRS balance due notice), you can use the Online Payment Agreement (OPA) application or you may submit Form 9465 or your own written request for a payment plan, attached to the front of your return or bill.

You will need to specify the amount you can pay and the day (1st-28th) you wish to make your payment each month. The IRS will respond to your request, usually within 30 days, to advise you that:

your request is approved
your request is denied or
additional information is needed

If the agreement is approved, a one-time user fee will be charged. The user fee is $105 for regular installment agreements and $52 for agreements to be paid by way of direct debit from your bank account. Taxpayers with income at or below certain levels can apply for a reduced user fee of $43.

For a direct debit installment agreement you will need to provide your checking account number and your bank routing number to initiate the automated withdrawal of the payment.

The user fee for restructuring or reinstating an existing agreement is $45 regardless of income levels or method of payment.

You may contact the IRS by phone or in person, or you may submit Form 9465 (PDF), Installment Agreement Request, through the mail. The form has space for you to write your checking account number and your bank routing number. However, if you choose to do so, you may staple a voided check to the form.

To initiate a payroll deduction installment agreement, submit Form 2159, Payroll Deduction Agreement. Form 2159 must be completed by your employer, so the IRS will set you up a regular installment agreement, and then convert it to a payroll deduction agreement upon receipt of the completed form from your employer.

Remember, penalties and interest will be added to the balance due even if an installment agreement is approved. For more information about installment agreements, please see www.irs.gov and enter the keyword "installment agreement".

Responding to your IRS Notice
It is important not to ignore an IRS notice. If you do not full pay your tax liability or make an alternative payment arrangement to pay the amount you owe in full, the IRS is entitled to take collection action. The IRS may file a Notice of Federal Tax Lien, and may levy and seize your property to satisfy the unpaid liability. You may refer to Topic 201 for information about "The Collection Process".

If you are unable to make any payment at this time:

Individual taxpayers may call 1–800–829–1040
Business taxpayers may call 1–800–829–4933 to receive assistance.

If we determine that you cannot pay any of your tax debt, we may temporarily delay collection until your financial condition improves. In order to assist you, we will need you to provide pertinent financial information from documents you should have available to you during the call, such as current pay stubs, rental agreements, or mortgage statements, and car lease/loan statements.

You have rights and protections throughout the collection process. If you would like some printed information on "your rights as a taxpayer," making arrangements to pay your bill, installment agreements, and what happens when you take no action to pay, refer to Publication 594 (PDF), The IRS Collection Process, and Publication 1, Your Rights as a Taxpayer.

Answer 2

First, it depends on what part of the process the IRS is in if this is your first you received from them then they haven't assesed it yet get a Lawyer to look into it if you have any room to negoiate on why you owe them that then try to settle in appeals. On average the IRS will settle in appeals on about $.50 on the dollar litigation is expensive even for them. Also if you think you have a case and you have not let your 90 day letter elaspe then you can file in tax court which means you dont have to pay the tax until after the court decides could give you a little time to find the cash. And if the 90 letter has elasped your pretty much going to have to pay and then if you think that you are due the some of it back sue for a refund. They will probably work out a payment plan if you are going to owe the money but they will charge interest. If it possible I would get a loan and pay it off or depending on how quickly you think you can pay it off a credit card with low interest. The earlier you consult a lawyer the better your chances are at reducing the liability.

Answer 3

It will completely mess up your credit, as that is second only to back child support as worst. They can sieze all accounts/property and paychecks. You could go to prison but not likely as long as you are not evasive or deceptive. My husband owed 3000 for 3 years after they tacked a bunch of penalties and fees. They just took it out of a large return we got after our twins were born. If you've got it pay it. If you don't, some times they will work out payments with you that will keep you out of trouble. Contact an accountant and the IRS.

Answer 4

I'd pay the money...you don't mess with the IRS. You're asking for a lot of hell if you don't pay it. They can and will make your life miserable because of the unlimited resources they essentially have....especially if you truly owe the money. If you didn't, i'd say get a lawyer but even that would cost more than $1200. Good luck! (Yes, you can go to jail)

Answer 5

They'll get their money. All of the normal collection procedures are available to them, plus a few unique to the IRS. Wage garnishment, liens on any real estate, attachment of bank accounts, etc. It can also wind up on your credit report for up to 10 years.

They WILL confiscate any tax refunds you have coming to you, both Federal and State.

Jail isn't all that likely though penalties and interest continue to accrue until the bill is paid in full. It's in your best interest financially to come to some sort of agreement with them and clear the debt.

Answer 6

It's really not that big of a deal, if you take care of it. If you just let it ride, it's going to come back and bite you. File an amended tax return for the year the taxes are for. The amended return will have instructions about how to send payment and the like. You can find all the tax forms at www.irs.gov

Answer 7

Well, eventually, if you refuse to pay, you could go to jail. Hasn't the IRS set up a payment plan? Contact them about doing that, then make your payments regularly, and there shouldn't be a problem. The will withhold any refunds you have coming, though, until it's paid off. And of course it will be accruing interest until it's paid off.

Answer 8

Call a tax attorney or the IRS itself and set up a payment plan.
It will continue to cause you problems in the future. The longer you wait the more than can tack on in penalty's. that 1200 can turn into 12000....just suck it up and pay it.

Answer 9

You can call them and dispute it and they will give you 90 days extention to file your finding or a 90 day extenton to pay it. You can make payments with interest but you have to contact the IRS and let them know. If you dont pay them trust me you will be in a world of hurt

Answer 10

I don't think you will go to jail for that amount but, i wouldn't take any chances. The irs will set up a monthly payment plan.