IRS Expects an Avalanche of Tax Problems After October 15
Probably you, like me, are waiting for 2020 to be over! In addition to Covid, and wildfires, and other 2020 problems, tax problems are mounting due to the economic situation. A lot of people knew they owed taxes but couldn't pay, so they got an extension. When the extensions expire October 15, taxes will come due. What are some things you can do right now if you are in this situation?
1. You should definitely file your tax return by October 15, even if you can't pay. This IRS won't work with you until you've filed all your tax returns through 2019.
2. If you can pay what you owe in the next 120 days, you will automatically qualify for a short-term payment plan with NO FEES! If you owe less than $10,000, you can set an installment agreement online (for a fee) to pay it off over 3 years or less. You can apply for both of these online and are guaranteed to be approved! Go to https://www.irs.gov/payments/online-payment-agreement-application .
3. If you owe more than $10,000, or if you owe payroll or other business taxes, you will probably want to consult someone who can represent you before the IRS - a CPA, an enrolled agent, or a tax attorney. In our CPA firm, we have been going to the most up-to-date training courses with the best tax resolution tips and tricks!
Most importantly: Don't ignore letters from the IRS! The sooner you deal with them, the better your situation will be. They will continue to send letters, issue liens, and eventually garnish your wages and levy your bank account until they get your attention.