Life is unpredictable, especially during a pandemic. If you weren’t able to pay your return timely for whatever reason, don’t panic. Here are some tips to help:
- Even if you can’t pay, you should still file your return. There is a penalty for late-filing a return, and it is based on how late the return is. The sooner you file, the less penalty.
- IRS is willing to accept installment agreements for payment. Visit their website at https://www.irs.gov/payments/payment-plans-installment-agreements for details. Many installment agreements can be applied for and accepted automatically on their website.
- If you can’t pay, IRS is also often willing to defer payment until a later date. This is called “Currently Not Collectible” status, and it prevents IRS from garnishing wages while you are in this status. More details are at https://taxpayeradvocate.irs.gov/get-help/currently-not-collectible.
- Any tax program that promises to settle your tax debt for “pennies on the dollar” is usually referring to the “Offer in Compromise” program. You could qualify if you cannot full pay your taxes over the ten year statute. You do not need to hire a tax agency or lawyer to submit an application. More details are at https://www.irs.gov/payments/offer-in-compromise.
- It is often better to owe a loan to a bank or a relative than to have a tax lien on your credit report. If you have the ability to borrow money to pay off the IRS, loans often have lower interest rate and penalties compared to paying off the IRS over time.
If you are in need of assistance with resolving your taxes with the IRS, Clergy Financial Resources also offers Tax Resolution services. Visit our website at https://www.clergyfinancial.com/services/tax-resolution/ for details.
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Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.
This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.
For more information or if you need additional assistance, please use the contact information below.
Clergy Financial Resources
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Maple Grove, MN 55369
Tel: (888) 421-0101
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Email: clientservices@clergyfinancial.com