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How to start the process of getting on a payment plan with the IRS?

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    How to start the process of getting on a payment plan with the IRS?

    This isn't a BK related question (FWIW, it's been over 10 years since my Chapter 7 discharge), but I figure that a lot of folks have found themselves in my situation.

    For 2019 (and will so again in 2020), I had a tax liability of under $1K and had NO taxes withheld. An initial 2019 return with NO tax liability had been done before the COVID emergency, and which it seems was processed, but during the emergency, I filed an amended return. I have not received anything from the IRS about the underpayment, and presume that under the COVID emergency rules, the amended returns are a low probability. I will file on April 15 for this year.

    I've heard "from here & there" that one cannot be proactive and contact the IRS to ask about setting up a payment plan, but has to wait until the IRS sends a letter (which could be problematic for me since I am away form my home for months at a time) about it, at which time a payment plan can be done.

    Also, it seems that the penalty & interest now is only about 10%, so I'd rather keep that debt than keep my high-interest debt.

    #2
    Unless and until you have a tax liability or tax "bill" from the IRS, setting up an OPA (online payment agreement) should not be done. You want to make sure it includes all your taxes, penalties, interest and other fees before setting it up. That's why you should wait.

    If you can't wait, you can always make payments into your tax account using the various online IRS tax payment services. This would reduce the amount that you owe. As the IRS and others always recommend... pay as much as you can towards the debt as soon as you can. This helps to reduce the amount of interest and could reduce the amount of penalties.

    I think the OPA (online) arrangement is pretty easy once you know what you owe and it's below some threshold (I think it used to be $50K).
    Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
    Status: (Auto) Discharged and Closed! 5/10
    Visit My BKForum Blog: justbroke's Blog

    Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

    Comment


      #3
      Originally posted by justbroke View Post
      Unless and until you have a tax liability or tax "bill" from the IRS, setting up an OPA (online payment agreement) should not be done. You want to make sure it includes all your taxes, penalties, interest and other fees before setting it up. That's why you should wait.

      If you can't wait, you can always make payments into your tax account using the various online IRS tax payment services. This would reduce the amount that you owe. As the IRS and others always recommend... pay as much as you can towards the debt as soon as you can. This helps to reduce the amount of interest and could reduce the amount of penalties.

      I think the OPA (online) arrangement is pretty easy once you know what you owe and it's below some threshold (I think it used to be $50K).
      AIUI, the net (penalty + interest) finance charge of past due taxes is only 10%; that's beats some of the CC debt I have, so I want to pay down the CCs and let the past due taxes ride for as long as possible.

      Comment

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