The people of America have felt the full impact of the financial crisis. Many have had trouble finding money to cover the bills and luxuries to which they’d previously been accustomed. There has also been an increase in the number of redundancies as companies have attempted to keep their costs to a minimum. The government has added to the pressure by making cutbacks and demanding the payment of taxes. However, the Internal Revenue Service (IRS) has played a key part in enabling people to pay their taxes. They are hoping that the American citizens will take the opportunity to manage their outgoings.
It is now possible to pay taxes in regular installments meaning that people don’t have the worry of having to recover from a huge splurge. They can pay an agreed amount each month however, it is worth bearing in mind that individuals who are unable to keep up with regular payments may not be granted tax relief. They are likely to accrue sizable debts, which must be repaid in the long term.
Details of the IRS Agreement
As previously specified, the IRS agreement details the payment of taxes over a defined period. It is a means of clarification for individuals who may be unsure of their financial responsibilities. A payment schedule is included in the main document for reference by the tax payer. There are also details of the actions which will be taken if payments aren’t made on time. In certain circumstances it may be possible to obtain an offer in compromise. This means that IRS will demand a reduced amount. However, the tax payer must prove that they meet strict criteria if such an agreement is to be made.
Negotiating With the IRS
There are a good number of reasons to pay your taxes in monthly installments. You’ll be able to balance the tax with other payments that you are required to make. It is quite possible to invest some of the money that would have had been paid in one chunk. However, it is worth pointing out it costs some money to set up an IRS agreement. Monthly payers must also be prepared to pay interest and the advice provided on the IRS website is to ‘pay your tax bill in full’. The government body has also suggested that people should resist the temptation to borrow money to cover their tax. The other piece of advice is to ensure that you reserve some money as a safeguard against emergencies.
It is very important to take time over decisions regarding tax and you should be aware of the financial dangers which could jeopardize your long term happiness. It would be a particularly good idea to speak to an independent financial adviser regarding your specific situation as they will be able to provide further information about the IRS and maybe even help you in the creation of a long term financial plan. You will certainly feel an increased sense of safety and security after taking such positive action.