Have a Tax Question? Ask a Tax Expert
I appreciate your problem.
The information on the IRS web site doesn't anticipate that anyone would want to contact the IRS for payment arrangements before the account has gone to collections.
If you are sure you can pay the rest by June, the site suggests that you visit an IRS office immediately and request a short term agreement to pay within 60 to 120 days. Penalties and interest will still accrue, but will be less than for an installment agreement, or if you don't contact the IRS at all.
They also suggest that, if you can borrow the money from other sources, the total cost would likely be less than the penalties and interest paid. If interest rates are going up, it's likely that the IRS interest late is less than what you could get otherwise, but the penalties are at an equivalent interest rate of at least 6%.
ok..if we make a partial payment..say 2500..the interest and penalty will be on the remaining balance. ?
Yes, that's correct.
ok..shall we make the payment..and wait for a bill to come from the IRS ..or stop by the office?
thats the last question I have for you..
I believe you should stop by the office. It may run in your favor if they actually have a procedure for payment waivers before the account goes to collections. I've never had a client who told me he or she couldn't pay before the account already in collections, so I can't verify that. But it should run in your favor if they do have a procedure.
ok sounds good..I'll give them a try..thanks again