I owe 15,000 from an 05 audit. I have the money but would rather make monthly installments on the money. I have good credit. First off would they let me make payments if I could pay it off in full? Secondly, what is the interest rate that they charge and are their hidden fees?|||If you have the cash, the IRS will want it to pay your tax. If they agree to payments the interest will be 10% and you can't get that at a bank account.|||The IRS interest rate is equal to the rate paid on three month treasury notes plus three percent. That rate is currently 5% and can change every three months.
In addition to this there is a penalty for late payment of 1/2% per month starting 11 days after you get your bill for the audit deficiency. This is reduced to 1/4% per month when your installment agreement is approved. If you sit on your hands until you get a nastygram threatening a levy on assets the rate goes up to 1% per month. In all cases, the maximum penalty is 25% of the unpaid tax.
There are no "hidden fees" but there is a processing fee of $105 for an installment agreement. This drops by over 50% if you approve direct debiting from your bank account. An installment agreement will be approved automatically if you can pay in full within five years. In your case a payment of $300 would be about right.|||The current interest rate is 5% along with a penalty rate. If you filed your return on time, the penalty rate is 1/4 of 1% monthly. Your minimum monthly payment would be around $250 with a one time setup fee of $105.
While the IRS would like to have you pay this off in full--and it's usually to your advantage to do so-- they can't require you to if your balance is less than $25k and you meet their minimum monthly payment criteria.|||Look at it another way:
If you didn't have any money, would you take out a loan from the IRS (and risk their wrath) in order to put cash in the bank?
It's the same thing, because in both cases, you have the debt to the IRS and the cash.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment