Currently in an IRS payment plan. Is there a better option?
I am in a payment plan with the IRS for my tax debt, but it seems like I am not making a dent at all. After the interest and penalties I hardly take anything off the principle. I only have 3 years left, do I have any options?
Originally posted 2011-05-22 04:56:47. Republished by Blog Post Promoter
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Maybe. I say that carefully because you have such short time left (I know it doesn’t seem that way with monthly payments). There are ways to get some of your Penalties reduced which in turn could help you pay off your debt faster. But if the IRS doesn’t think you will pay off the debt in full within your three years either way, they will not accept your Peanlty Abatement request. Here is an article about penalty abatement so you can have some more information.
You always have the option to pay it off early. Double up on the payments until it is gone.
Try and increase your installment payment amount each time that you are schedules to make a payment OR make some extra payments when you can that would really help to take care of this problem and should reduce and shorten your schedules payment time period.
Hope that you find the above enclosed information useful. 05/06/2011
Call IRS at 1-800-829-0922 to raise the monthly payment, to an amount you can comfortably afford each month.
Or if you have credit card available to use use it to payoff IRS, the interest is cheaper on a cc than IRS b/c IRS continue to add on interest and penalties each month probably amount the same amount as your payment
good luck
An off the rack installment agreement will pay your bill off in five years. Don’t call IRS and request that the payment amount be increased, just send more money when you can. This will give you flexibility if you have a bad month.
the best one, pay it off
You actually have it backwards. 100% of your money is being applied to the tax first and only after that is paid is it applied to the penalties and interest. Yes, those are being added each money, but on a DECLINING balance.
As for a “better option” if you haven’t screwed up the installment agreement, you are adding 6% penalties and 4% interest each year. I don’t know of any credit card that is charging less than 15%. If you can find a relative who will front the money for less, go for it. A bank isn’t likely to help you.