Q: Strategically paying the IRS before filing previous years returns in order to qualify for a long-term payment plan.
I owe the IRS for previous years around $65K and have not yet filed for those years. I would love to set up a payment plan, but according to their website, in order to qualify for a long-term payment plan "you must owe $50,000 or less in combined tax, penalties and interest, and filed all required returns."
See here: https://www.irs.gov/payments/payment-plans-installment-agreements
The problem is:
1.) I owe more than 50K, which means if I file, they will demand payment in full or demand it all within 120 days. (I do not have the money to do this)
Can I strategically submit a payment to the IRS for 30K (all I can possibly do now) and THEN file my previous tax returns? This way I will owe less than 50K AND will have filed the previous years. (thus meeting eligibility enter a long-term payment plan)
Would this be a safe/smart move? I want to pay my due taxes but I don't want to risk losing everything. What would you do?
A: You are not eligible for any resolution plan until you are in compliance. So until you file those prior year returns your application for an installment agreement will be rejected.
Making a lump sum payment will reduce your IA amount and reduces interest on your account.
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.