Paying taxes by 4/15/09 - credit card or IRS installment plan (OPA)??

[Anonymous]

 i am in the same boat will use credit card to pay taxes this year, the way i look at it i would rather owe the

cc company money than the irs, want my dealings with irs as short as possible , also if economy crashes and

i loose my job and house i would file bk and cc debt would be discharged , i do not know if irs payment plans

get discharged under bk. 

[Anonymous]

Plus, you get rewards if you use the right card..........

[hemi961]

I owed $28,000 in 2006 and thought about using their payment plan.  However, if memory serves me correctly somewhere in the fine print it stated that they could file a lien if they were concerned that you might not be able to pay.  I could be wrong but it seems that I remember that, so I paid them in full.  That's what you get for having extremely (but unexpected) good fortune in the last month of the year.  If I had been sure they wouldn't file a lien, I would have utilized their payment plan.  Seems like it had a set up fee and high interest, but I didn't trust them enough to take advantage of it. 

[Anonymous]

You heard it here first folks, someone doesn't trust our Government. Egad !

I sure hope this doesn't spread.

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I don't know about the lien aspect. I have read that they are not as aggressive in their pursuit of payments due to the recession. I'm not taking any chances, they are #1 on my "to pay" list each month.

[fishbjc]

I've finally got those turkeys paid off!  I owed them 4k and my payment was $100 monthly, plus they sucked up last years return and the stimulus.

A word to the wise.....I missed one month....the penalty was almost $90! 

If you can get them paid inside of one year, it won't be so horrible. 

[GregB]

Let's start with a different attack.....

What does your accountant suggest? 

If you don't have a "real" accountant consider that one might be able to do your tax returns and lower your taxes.

If your taxes are so simple that you didn't need one to do your taxes, then perhaps neither of these are relevant. I can tell you from my experiences that my accountant always said that not paying the IRS in full was always the LAST resort. However that info is pretty old now and the "rules" may have changed.

[Anonymous]

I agree with CreditAddict.  I also agree with Hauling.

I would also ask a queston:  before "what will pay with?", I ask "how much you can afford to pay per month?"  If you only need 3-6 months that is a different picture than if you need 2 years.

The longer the term, the more the APR is a factor.  If you have adequate CC and are going to pay short term, then it probably won't be a problem when the CC sees you make hefty pay downs.  But if you are going to have to "work" this one off, then you probably need to compare a loan with a CU to the IRS payment plan.

The IRS is actually quite helpful when it comes to "helping you" find a way to pay them voluntarily.  They will estimate and calculate payments, interest, etc.  Then you can use that info to shop comparisons with CU.

IRS won't pull your CR and create an inquiry.  IRS won't report it as long as you pay as agree.  This means no FICO or credit issues.  However, they may charge you higher APR and fees than a loan.

Message Edited by txjohn on 03-29-2009 05:47 AM

[Anonymous]

I am leaning toward the installment plan with the IRS.  However, I read on-line that the IRS accepts an installment plan if you are current on your quarterly payments as a self-employed person.  I made payments but obviously not enuf and also have underpayment penalties, so I don't know if they will approve me.  I did not pay enuf because I lost focus on paying my taxes every month thru the EFTPS - not because of some sudden windfall of income.  

Do you pay the $105 for them to make a decision and set up the loan or is it just a set up fee for the loan once it has been approved?  

Everyone's info has been great.  I particularly thank txjohn for his detailed response.  

[Anonymous]

I am not an attorney nor accountant, so this is NOT legal counsel or professional advice.

However, I have worked with many people in past 3 years who have entered into tax payment plans for 941 payroll, corp income taxes, personal taxes, etc.  When you don't have the $$$, they will take payments, you just need to explain that.  If you provide an reasonable ability to repay in reasonable time, they will accept, in my experience.  JUST DO NOT MISS the payments.  All bets off at that point.

But, if you don't have the cash, that is what you need to tell them when you talk to them.

As far as accountants go, I have this one thing to say:  Many CPA's and accountants are afraid of the IRS and/or are afraid of liability and will therefore advise you to pay it with credit or loans.

Think about it.  If they advise you to pay with credit/loan, there is no way the IRS can ever be an issue of liability between you and them.  If they advise the payment plan with IRS, if something goes unexpected you may say BOO!  And, I have had 2 accountants over the years that had no BA**'s when it came to the IRS.

So, get advice, but know the potential motivations, your circumstances and TALK to the IRS.  They don't bite unless you ignore them and don't make arrangements.

SPECIAL PROMOTION:  You may use this advice in combination with 75 cents to redeem for one 12 oz can of soda or beverage, your choice of any flavor from those available at any Retail location. 

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Message Edited by txjohn on 03-29-2009 11:31 AM

[Anonymous]

So, I should call the IRS instead of just filling out a form 9465 or the OPA?  If I call the IRS, will they immediately be able to tell me if I am ineligible because I have not paid enuf in qrtly taxes? 

txjohn - I realize you are just a nice person trying to help.  No need for a disclaimer.   I need to move where you are.  I don't think I can buy a drink for 75 cents.   

http://www.kiplinger.com/columns/taxtips/archive/2006/tax0327.html   This is an article I read about the IRS installment plan.  I trust Kiplinger.  I wish S Orman would comment on this post!!!