03-29-2009 11:37 AM - edited 03-29-2009 11:39 AM
Sounds like Kiplinger and I agree. Yep, I would suggest it. I know the IRS seems intimidating, but I actually am in the process of an OIC (offer in compromise) for a corporation that I got left holding the bag on (due to other people's bad management, but me left on the hook. You'd think I had learned....had a BK 1998 due to a business I invested and signed dotted line and left holding bag as last man standing when I couldn't personally pay all the corp liabilities).
I have found them to be more than reasonable, more than willing to find an equitable solution. I offered them a couple of my 6 kids, but they won't take em
I think the best part of the Kip advice is "don't ignore" and "don't assume." The information is free and worst case if you don't like their offer or what comes of it, you all ready have peace of mind knowing you have the option of using credit or loan. Make an informed, unassumed decision that is in your best financial interest while resolving the issue.
03-31-2009 11:11 AM
Still workiing on a decision. Just passing on what I've learned in case someone else needs the info.
IRS Payment Plan - penalty fee each month of 1/2 of 1% of the tax due PLUS their interest rate that is variable (now at 4%). $86 penalty fee - that would go down each month. Roughly $386 a month for 60 months. If you set up the debit pay, you can specify what day of the month you want it drafted from your checking account.
Paying by credit card - there is that convenience fee if you charge directly to the IRS, plus whatever the interest on that account is. Also, any direct payment for taxes by a credit card is not discharged under bankruptcy (like someone said) if you file Chapter 7. You have to file Chapter 13.
I called the IRS today (waited in the que for 20 minutes). The lady was very knowledgeable. Any question I had, she knew the answer. I asked her as an aside, what did she recommend. She said normally it would be the credit cards, but they are finding people are having their interest rates jump on those cards, so in the long run using IRS might be best. She said you have to evaluate carefully.
I'm looking at what balance xfers I have that will let me put it directly in my checking account. Then there are xfer fees of 3 to 4% - some have no maximum fee limit. One of my credit cards, I found that altho I have an APR of 10% - they have the option at anytime w/o notifying me of going up to their default rate - which is now 27.24 APR. Thank goodness I don't use that card, but they probably all can do it.
This year all I am going to do is pay taxes - for this year and last year. I will not be in this mess again.
03-31-2009 02:50 PM
PenFed & Alliant credit cards have max fees on cash advance of like $25 or something. BoA and others no cap so can be expensive.
Also, PenFed has a 5.99 BT for life of balance offer.
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