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We Can Work It Out
Tip of the Month
March 2002
We Can Work It Out
âLife is very short and thereâs no tiiiiime for fussing and fighting my friend.â Beatles fans may recognize the lyrics without the music. And it may have taken a while, but the IRS is catching the spirit. If the taxes you owe are in excess of what you have the ability to pay, or if you have the money to pay your tax bill but doing so would cause a hardship, the IRS is willing to work out a plan.
This is done through the IRS âOffer In Compromiseâ program. This program was initially set up to deal with persons who were unable to pay the full amount of their tax bill. It allows for strapped taxpayers to offer to settle with the IRS for less that 100 cents on the dollar.
But due to a recent revisions, the IRS will now work with people who do have the money to pay their tax bill, but if they did so, would cause a hardship. For instance, if an elderly person on a fixed income had to empty their savings to cover the whole bill. Or if someone was having to care for a chronically ill family member and would not be able to meet ordinary living expenses.
For details (and there are plenty), see IRS Form 656. And if youâre really serious about this, a good place to start is right here.
Hey Mister Postman Wait and See, If Thereâs A Letter, A Letter For Me...
Actually, it should be âfrom meâ if youâre mailing your return in. We thought weâd give you a few mailing tips for youâre your own safety:
First we strongly recommend that you donât file so close to the wire. But if you have no other choice, your return (or extension request) must be postmarked by 11:59 pm, April 15th. Just dropping it an a mailbox by midnight doesnât count. That oneâs easy.
If you have a private meter, the IRS does not recognize the date affixed with the postage as a valid post mark date. It is possible to date the envelope by April 15th and actually drop it in the mailbox later.
Letâs ask the obvious: Did you put enough postage on the envelope? Wouldnât it be embarrassing for your spouse to find the envelope returned for lack of postage? Preserve domestic harmony. If youâre not sure, slap some more stamps on there.
If youâre the finicky, meticulous type, and you want proof that the IRS actually got your return, certified mail is accepted. Let not the last step trip you up, keep on dancing.
Time, Time, Time Is On My Side, Yes It Is...
If you really need another 30 days to pay your IRS bill, there is a loophole you can use. The IRS will give you another 30 days to pay your bill if you ask them to figure your tax return. Is it worth the risk? Maybe. You have to make less than $100,000 per year and you cannot itemize deduction. For the complete details (thereâs always details), or you just like reading IRS publications, click on this: IRS Publication 967 ("The IRS Will Figure Your Tax.").
Donât Worry, Be Happy...
Nothing here about the IRS. Just good advice: Enjoy life.
This is done through the IRS âOffer In Compromiseâ program. This program was initially set up to deal with persons who were unable to pay the full amount of their tax bill. It allows for strapped taxpayers to offer to settle with the IRS for less that 100 cents on the dollar.
But due to a recent revisions, the IRS will now work with people who do have the money to pay their tax bill, but if they did so, would cause a hardship. For instance, if an elderly person on a fixed income had to empty their savings to cover the whole bill. Or if someone was having to care for a chronically ill family member and would not be able to meet ordinary living expenses.
For details (and there are plenty), see IRS Form 656. And if youâre really serious about this, a good place to start is right here.
Hey Mister Postman Wait and See, If Thereâs A Letter, A Letter For Me...
Actually, it should be âfrom meâ if youâre mailing your return in. We thought weâd give you a few mailing tips for youâre your own safety:
First we strongly recommend that you donât file so close to the wire. But if you have no other choice, your return (or extension request) must be postmarked by 11:59 pm, April 15th. Just dropping it an a mailbox by midnight doesnât count. That oneâs easy.
If you have a private meter, the IRS does not recognize the date affixed with the postage as a valid post mark date. It is possible to date the envelope by April 15th and actually drop it in the mailbox later.
Letâs ask the obvious: Did you put enough postage on the envelope? Wouldnât it be embarrassing for your spouse to find the envelope returned for lack of postage? Preserve domestic harmony. If youâre not sure, slap some more stamps on there.
If youâre the finicky, meticulous type, and you want proof that the IRS actually got your return, certified mail is accepted. Let not the last step trip you up, keep on dancing.
Time, Time, Time Is On My Side, Yes It Is...
If you really need another 30 days to pay your IRS bill, there is a loophole you can use. The IRS will give you another 30 days to pay your bill if you ask them to figure your tax return. Is it worth the risk? Maybe. You have to make less than $100,000 per year and you cannot itemize deduction. For the complete details (thereâs always details), or you just like reading IRS publications, click on this: IRS Publication 967 ("The IRS Will Figure Your Tax.").
Donât Worry, Be Happy...
Nothing here about the IRS. Just good advice: Enjoy life.
These articles are intended to provide general resources for the tax and accounting needs of small businesses and individuals. Service2Client LLC is the author, but is not engaged in rendering specific legal, accounting, financial or professional advice. Service2Client LLC makes no representation that the recommendations of Service2Client LLC will achieve any result. The NSAD has not reviewed any of the Service2Client LLC content. Readers are encouraged to contact their CPA regarding the topics in these articles.
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