Have a Finance Question? Ask a Financial Expert Online.
Welcome to Just Answer. I am here to help you resolve your tax and finance concerns. Please feel free to ask anytime you need extra help.
I am sorry that you received bad advice. This places you in a terrible situation. However, there are several things you can do to help this along the path to resolution.
1.You can ask, and if need be sue, the old accountant for the penalties and interest imposed because of the incorrect advice. This will not remove the entire issue but may ultimately assist you financially.
2.You were not properly advised about the payment arrangement. The IRS, while not a bank, is willing to enter into such arrangements to help taxpayers resolve their debts while not falling further behind. The downside of this is that the fees they charge are quite high and the interest will continue to accrue until the debt is paid in full. Here is a short piece from the IRS about this. It has links to forms and other information you may wish to consider. I will then continue my remarks in another post due to space limitations.
You can make monthly payments through an installment agreement if you're not financially able to pay your tax debt immediately. However, you will reduce or eliminate the amount of penalties and interest you pay and avoid the fee associated with setting up an installment agreement if you pay your tax bill in full. Before you apply:
Pay the full amount you owe within 120 days to avoid the fee. You should apply online to specify this option (or call if you owe more than $25,000). If you cannot pay the full amount within 120 days, the fee for setting up an agreement is:
To keep your account in good standing:
If you don't receive your statement, send your payment to the address listed in your agreement.
There may be a reinstatement fee if your agreement goes into default. Penalties and interest continue to accrue until your balance is paid in full. If you are in danger of defaulting on your payment agreement for any reason, contact the IRS immediately. The IRS will generally not take enforced collection actions:
3.Another option available to you is to submit an Offer In Compromise (OIC). This is a process which enables you to offer to settle the debt for less than full value. The OIC process has a downside as well. It is a task requiring a great deal of disclosure and can be complex. If you chose this route you should seek professional assistance from either a CPA or tax attorney. You can best find these professionals through referrals from family, friends, or coworkers. To enable you to familiarize yourself with the OIC process, I am attaching another piece from the IRS. It will follow my last comment. If you need further assistance, please feel free to ask.
An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can't pay your full tax liability, or doing so creates a financial hardship. We consider your unique set of facts and circumstances:
We generally approve an offer in compromise when the amount offered represents the most we can expect to collect within a reasonable period of time. Explore all other payment options before submitting an offer in compromise.
Before we can consider your offer, you must be current with all filing and payment requirements. You are not eligible if you are in an open bankruptcy proceeding.
You'll find step-by-step instructions and all the forms for submitting an offer in the Offer in Compromise Booklet, Form 656-B (PDF). Your completed offer package will include:
Your initial payment will vary based on your offer and the payment option you choose:
If you meet the Low Income Certification guidelines, you do not have to send the application fee or the initial payment and you will not need to make monthly installments during the evaluation of your offer. See your application package for details.
While your offer is being evaluated:
<< Make a Payment
Find all you needto consider and make an offer in Form 656-B, Offer in Compromise Booklet (PDF)
Doubt as to LiabilityIf you believe there is verifiable doubt that you owe part or all of your tax debt, use Form 656-L, Offer in Compromise Doubt as to Liability (PDF)
Pub. 594: IRS Collection ProcessExplains the actions IRS may take to recover taxes owed. Download Pub. 594 (PDF)
I need help understanding a company's sales statement.