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PDtax
PDtax , CPA, MBA
Category: Finance
Satisfied Customers: 3906
Experience:  Tax professional and business consultant for 35 years.
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I owe the IRS $17,000 for my 2011 taxes. I cant afford to

Resolved Question:

I owe the IRS $17,000 for my 2011 taxes. I can't afford to pay the amount. I started a company this past year and I need to make payment arrangements.

Before I contact the IRS what is the longest payment plan the IRS will agree to for $17,000?

Right now I have no income coming in from my new business so I would be paying from my savings.

Thanks!
Submitted: 4 years ago.
Category: Finance
Expert:  PDtax replied 4 years ago.

PDtax :

hi from just answer.

Customer: replied 4 years ago.
I don't see a response.
Expert:  PDtax replied 4 years ago.

thanks for your patience.

 

IRS gives individual taxpayers time to make payment on their individual taxes, which is what most people think of when they ask about installment agreements. Your question is about business taxes, and you wanting time to pay them on the business' behalf. That's different.

 

I don't know if IRS is involved yet, or if they have asked you personally for the funds, or the type of business form (are you personally liable or not for all of it).

 

Once you get back to me with some more facts, I can give a specific answer, and maybe a recommendation or 2.

Customer: replied 4 years ago.
no - the taxes due are due from my individual tax return, not the business taxes.

I have not talked to the IRS yet. nor are any business taxes due?
Expert:  PDtax replied 4 years ago.
Okay. I see the reason for the mixup. The debt is yours personally, for personal income taxes.

Since IRS is not yet involved, you could make a request for an installment agreement with form 9465. It is often filed with the return showing the balance due. A link to the form is here: http://www.irs.gov/pub/irs-pdf/f9465.pdf

From IRS.gov (link: http://www.irs.gov/taxpros/article/0,,id=99090,00.html):

Setting Up an Installment Agreement

This agreement allow you to pay your full debt in smaller, more manageable amounts. Installment agreements generally require equal monthly payments. The amount of your installment payments and the number you make will be based on the amount you owe and your ability to pay that amount within the time we can legally collect payment from you.

You should be aware, however, that an installment agreement is more costly than paying all the taxes you owe now. As with most revolving credit arrangements, we charge interest and penalties on the unpaid portion of the debt.

Another cost associated with an installment agreement is a user fee. This is a one-time fee (currently $52 for direct debit agreements and $105 for non-direct debit agreements) we charge to set up the agreement. For eligible low-income individuals, the fee for entering new agreements will remain $43. If you don't meet the terms of the agreement throughout the life of the agreement, we charge an additional fee of $45, regardless of income level, to reinstate it.

If you want to pay off your tax debt through an installment agreement, call the number shown on your bill. If you owe:
$50,000 or less in tax, we'll tell you what you need to do to set up the agreement
More than $50,000, we may still be able to set up an installment agreement for you, but we may also ask for financial information to help us determine your ability to pay

Even if you set up an installment agreement, we may still file a Notice of Federal Tax Lien to secure the government's interest until you make your final payment.

Expert again...

The amount you owe can be arranged informally, without the financial disclosure referred to for larger debts.

The term available is six years or less. The debt is interest bearing, and penalties will be added if they have not.

You can apply online for an agreement at the following link: http://www.irs.gov/individuals/article/0,,id=149373,00.html

Thanks for asking at Just Answer. If you need anything more, please ask.
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Expert:  PDtax replied 4 years ago.
Do you need anything more about your question?