topic Re: OWE THE IRS $4701. PAYMENT PLAN? in Rebuilding Your Credit

OWE THE IRS $4701. PAYMENT PLAN?

Derrick1977 — Mon, 31 Aug 2015 23:00:52 GMT

Hi Everyone.

I owe the IRS $4701 and I was sent a certified letter on last week. I can't afford to pay that right now but when I went online to get payment arrangements, I saw the below four options. I need the monthly plan below but the interest rate on that one is really too high. Can anyone offer any advice? This wi be my first payment plan.

Full

$4701.80

estimated additional cost

--------------------------------

due in 10 days

no extra interest or penalties

no user fee

--------------------------------

60 Days

$4814.36

$112.56

estimated additional cost

--------------------------------

extra time to pay

low interest and penalties

no user fee

--------------------------------

120 Days

$4924.37

$222.57

estimated additional cost

--------------------------------

extra time to pay

low interest and penalties

no user fee

--------------------------------

Monthly

$5702.95

$1001.15

estimated additional cost

--------------------------------

extra time to pay

high interest and penalties

additional user fee

--------------------------------

Re: OWE THE IRS $4701. PAYMENT PLAN?

Anonymous — Mon, 31 Aug 2015 23:04:06 GMT

If I remember correctly from my payment plan, half of what you are paying are penalties not interest.

You can do the monthly plan, and you can still overpay, and end up paying less. That's the amount for full term.

Re: OWE THE IRS $4701. PAYMENT PLAN?

Derrick1977 — Mon, 31 Aug 2015 23:09:36 GMT

Hi Hanales. Thanks for responding.

So in your opinion, the payment plan that as $1000 to the bill is reasonable?

Re: OWE THE IRS $4701. PAYMENT PLAN?

Anonymous — Mon, 31 Aug 2015 23:12:36 GMT

Reasonable? That's subjective. They are the feds and basically get to say "this is how it is". This is from the IRS correct? Not a third party?

Re: OWE THE IRS $4701. PAYMENT PLAN?

Derrick1977 — Mon, 31 Aug 2015 23:18:16 GMT

Yes, its from the IRS however, is there a way to get a lower amount than the the additional $1000 added. However I need the monthly payment plan.

Re: OWE THE IRS $4701. PAYMENT PLAN?

Anonymous — Mon, 31 Aug 2015 23:28:12 GMT

The only way to pay less is to pay it faster. The best approach is put as much towards it as you can every month, more than what they are asking for, you will pay far less in interest and penalties.

If you have good credit you could try to get an installment loan from your bank or credit union to pay it off and then pay them back at a lower rate. Not too many options beyond that though.

Re: OWE THE IRS $4701. PAYMENT PLAN?

Derrick1977 — Mon, 31 Aug 2015 23:35:31 GMT

Ok, I guess the longer IRS payment plan it is lol.

Re: OWE THE IRS $4701. PAYMENT PLAN?

pipeguy — Mon, 31 Aug 2015 23:55:39 GMT

Suggest you look into an Offer in Compromise available through the IRS - it's kind of a PITA to set up, but if you get accepted, it's typically a 24 month payback and the amount is frozen based on what you and the IRS agree to as a settlement

https://en.wikipedia.org/wiki/Offer_in_compromise

Re: OWE THE IRS $4701. PAYMENT PLAN?

Anonymous — Mon, 31 Aug 2015 23:58:49 GMT

@pipeguy wrote:
Suggest you look into an Offer in Compromise available through the IRS - it's kind of a PITA to set up, but if you get accepted, it's typically a 24 month payback and the amount is frozen based on what you and the IRS agree to as a settlement

https://en.wikipedia.org/wiki/Offer_in_compromise

I second this suggestion ^^^

Re: OWE THE IRS $4701. PAYMENT PLAN?

Derrick1977 — Tue, 01 Sep 2015 00:08:14 GMT

Thanks Pipeguy and AhMedinVA.

How do I go about this, do I just call them tomorrow and see what they offer me?

Re: OWE THE IRS $4701. PAYMENT PLAN?

pipeguy — Tue, 01 Sep 2015 00:37:56 GMT

I had a nice long answer all typed out and the wonders of online made it all disappear....

Second try, cliff note versionless a lot of details: There is a form on the IRS site to use, start there and you'll get assigned a case worker of sorts. Typically they'll settle for much less than what is owed, but at the very least they'll work with you to set up a payment plan even if they don't approve the Offer in Compromise.

Re: OWE THE IRS $4701. PAYMENT PLAN?

elim — Tue, 01 Sep 2015 00:39:57 GMT

@Derrick1977 wrote:
Thanks Pipeguy and AhMedinVA.

How do I go about this, do I just call them tomorrow and see what they offer me?

here is a better link.

i would suggest pay it, and pay it quick. use a CC (you can make 2 CC payments per year) and BT it to a 0% for 18 months.

i have been dealing with a 13k (20k with I and P) tax lien for a few years and it sux.

Re: OWE THE IRS $4701. PAYMENT PLAN?

pipeguy — Tue, 01 Sep 2015 00:51:55 GMT

@elim wrote:
@Derrick1977 wrote:
Thanks Pipeguy and AhMedinVA.

How do I go about this, do I just call them tomorrow and see what they offer me?
here is a better link.

i would suggest pay it, and pay it quick. use a CC (you can make 2 CC payments per year) and BT it to a 0% for 18 months.

i have been dealing with a 13k (20k with I and P) tax lien for a few years and it sux.

If you do an offer in compromise right - or maybe I just got lucky - there is no tax lien recorded. IRS settled for just under 10% of their original demand with 24 payments with the amount locked - no additional interest or penalities. Frankly to this day I swear I didn't owe them a penny, but when they demand an amount equal to the price of a house, you end up paying the blood money as the lessor of two evils. We recently completed the payoff, but you can bet they'll be watching my return for the next 5 years because they have a right to "revisit and reinstate" the original amount if they determine "false returns" for 5 years.

Guess there is a bright side to no longer having my own business and working on a W-2 yearly income today.

Re: OWE THE IRS $4701. PAYMENT PLAN?

Anonymous — Tue, 01 Sep 2015 00:57:12 GMT

First off make sure you owe the amount. I say this because sometimes they send letters demanding money but you actually don't owe that much if you amend the return. The bottom installment agreement is if you pay over, I think, 5 years and they have a 3% interest rate. If you do a long-term agreement they will also charge a fee to set it up.

Re: OWE THE IRS $4701. PAYMENT PLAN?

Anonymous — Tue, 01 Sep 2015 02:09:10 GMT

I don't believe that an Offer in Compromise will result in a tax lien by itself, unless there is a tax lien prior to the Offer in Compromise

If I recall correctly, the IRS will give you up to two years to pay the amount you offered in the Offer in Compromise in monthly installments

I heard some people were successful offering about 20% to the IRS, one strategy is to convince the IRS that the amount you offered is about the same as what the IRS can reasonably expect to collect from you

Re: OWE THE IRS $4701. PAYMENT PLAN?

Anonymous — Tue, 01 Sep 2015 06:06:59 GMT

I have been on the IRS repayment plan, this is my third one. All for personal income taxes .

I had a very bad experience with a tax preparer firm and they basically messed me up. I didnt file for about three years and tried to make it right, but chose the wrong firm to work with. They sent me the forms they had prepared, vastly different from what we had discussed, and I wrote back with my concerns and said it needed to be revised and listed where they had what I considered bad info. Turns out, they collect data and fees locally but send the data to a central location in NC and they have people complete it there. The woman that contacted me after completing my forms was in trouble with her job soon after that, and tried to impress her boss by completing a lot of work quickly, so she submitted my forms to the IRS anyway, saying I had authorized them to. She later lost her job (and rightfully so!) but I had forms saying I owed tens of thousands, instead of about 5k.

I finally hired a good firm (another 2500 bucks) and they submitted corrected forms, by this time, 7 or 8 years involved. Had a payment plan with IRS for about 350 a month, and the amount due was reduced after the IRS processed my new forms, one by one, and it took something like 15 months to get all years processed. Then got a new plan for about 150 a month and it was paid down to about 2k.

In 2013, got blind sided with a 1099c that resulted in about 3200 additional taxes due. Negotiated a new plan for 50 a month, and they kept my refund again last year so new amount is just under 2k again.

Each time I had to establish or restructure a payment plan with the IRS, I was charged a fee of 50 bucks. You also need a comfortable chair and a good phone when you call them, it was always a 45 minute hold time for me, so you need a speakerphone or a head set..

I am happy with payment plan from IRS and will continue with it until paid off, hopefully after I file this time.

The IRS debt does not show anywhere on my CRs and never had a tax lien. It is sort of like a hidden TL.

HTH

Re: OWE THE IRS $4701. PAYMENT PLAN?

Anonymous — Tue, 01 Sep 2015 13:08:59 GMT

Good luck trying to get in touch with them! We have been trying for a few months now and after waiting an hour each time, you get disconnected. We pay $1000 a month which is automatically deducted from our bank account. So whatever payment plan you decide on doing, just be aware that only 40% of their calls are getting through to speak to someone. We have called everyday, numerous times a day for 4 months now. Your placed on hold for the next available person which ends up being almost an hour or longer, only to be disconnected because its a dead line. Frustrating!

Re: OWE THE IRS $4701. PAYMENT PLAN?

Anonymous — Tue, 01 Sep 2015 13:39:49 GMT

How much debt do you owe in total for other things like on a house vehicle etc. if you owe more than what the 1099c are you can do the insolvency worksheet and owe nothing. I received 1099c couple years ago since we owed student loans and house it was way more than the 1099c debt we ended up owing nothing. You should check on that to save you money on having to pay the irs back for any cancelled debt.

Re: OWE THE IRS $4701. PAYMENT PLAN?

Anonymous — Tue, 01 Sep 2015 13:42:32 GMT

form 8641 on IRS Website http://www.irs.gov/pub/irs-pdf/p4681.pdf

Re: OWE THE IRS $4701. PAYMENT PLAN?

Anonymous — Tue, 01 Sep 2015 13:45:23 GMT

student loan debt, credit card debt all count as debt for form 8641 also