Do You Owe the IRS?

Today I met a woman who owes over $15,000 to the IRS. She is not working and is trying to find a job. She hasn't paid her taxes in over 5 years. Here is an important tip, when you are in debt make sure you pay the IRS. It's just that simple. The IRS can put a tax lien on your personal property such as a boat, car, home, etc. for the money you owe them or they can garnish your wages.

If you haven't filed taxes for the IRS whether you owe money or not you should file your taxes immediately. If the IRS sent you a bill stating you owe them money file your taxes for all years missed so you can see exactly how much you owe, the bill sent to you is an estimated bill based on the estimated salary for the years you did not file taxes.

If you are not working then the first step is to get a job maybe two to help pay back the money owed. If you are working you may need to get a part-time job and reduce monthly expenses to get extra money to pay back the taxes owed. This will require you to create a monthly spending plan (budget) to determine your monthly income versus your monthly expenses (see how much money you have coming in and going out).

Next, call the IRS and tell them you would like to setup a payment plan based on how much you can afford from your monthly spending plan. Also try to negotiate with them to reduce interest and penalties, you may have to consult an accountant to find out what options are available to you. Good luck!