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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16547
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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I just found out i will be short about $60K in taxes to the

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I just found out i will be short about $60K in taxes to the IRS. I know there are payment plans with the IRS but is this my best choice. I have about $150K in equity in my house, should i use that?

Megan C :

Hello! I am a CPA here to assist you with your tax questions. My goal is to provide you with excellent service today.

Megan C :

How are you today?

Megan C :

The IRS does have payment plans, but penalties and interest continue to accrue on any balance. So, if you can secure a home equity loan to pay your delinquent taxes, that would be a better bet

Megan C :

That way you are square with the IRS and then have a longer payment schedule to pay off the balance.

Customer:

Well, as you might assume, i could be better. I just found out I will be about $60K short for IRS taxes in the next 3 weeks.

Megan C :

I'm sorry to hear that. The home equity loan would be a better option to pay, because penalties and interest will not continue to accrue

Customer:

Could i do part home equity and part IRS plan if i need to?

Megan C :

Oh certainly.

Megan C :

The IRS is very flexible.

Megan C :

They just want to get paid, that's all.

Customer:

How does the IRS address interest and do you know the interest rate?

Megan C :

Let me look the interest rate up. They accrue interest on the unpaid tax.

Customer:

Thank you, XXXXX XXXXX wait...

Megan C :

It's currently 3% for underpayments...so not too bad

Customer:

That may be less than a home equity line. Do i automatically qualify for an IRS payment plan? I may be better than going through the app process and credit process for a home equity line. Thoughts?

Megan C :

Well, $50,000 is the threshold for automatic approval.

Megan C :

So if you could pay down the tax debt to $50,000 you would automatically be approved.

Megan C :

If not, then you would go through the application process.

Customer:

Thanks, XXXXX XXXXX that is the answer i was looking for. Perhaps i can pull $16K out of home equity and the balance with the irs..

Megan C :

Sounds like a good plan. I wish you the best of luck.

Megan C :

Is there anything else I can assist you with tonight?

Megan C :

If not, please take a moment to rate my response as "excellent" so that I may receive credit for assisting you today.

Customer:

Thank you for the time and assistance. I am all set for now. have a good evening.

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