Federal Tax, question

[willsurvive]

My dh owned a sole-prop business that has closed down. We owe $2200 plus penalties to the IRS for employer taxes. We realize this isn't dischargeable. Anyway, should we pay them what we can before we file? What about a possible refund for 2008, would the IRS take the money owed before that and release any difference? And finally, will the IRS work with payment arrangements?

Thanks.

[fltoo]

IRS will give you a payment plan with interest of course. I would definitely pay them first as the interest is not cheap. I really can't see a trustee going after the IRS to avoid a preferential payment.

Fill out the form on the IRS.gov website to ask for it.

[willsurvive]

No, I definitely know we could pay the whole amount and it wouldn't be preferential payment. I'm more wondering about a future refund. Thanks.

[Tbornetun]

If you haven't paid them yet, yes they will take it. If it would be easier for you financially, wait and have them take your refund.