It’s always better to pay what you can, and show the IRS your intention to pay the rest of your tax liability. Taxpayers can e-file their returns through this final deadline.
Virginia Beach, VA (PRWEB) October 12, 2011
Taxpayers who filed an extension request in April now face the October 17 (October 31 for taxpayers in designated Hurricane Irene disaster areas) tax filing deadline for 2010 returns. Liberty Tax Service urges those who still owe taxes and must file to examine several available options. Taking advantage of the IRS tax extension allows more time to file, but not to pay any taxes due, so interest is accruing on taxes not paid by the April filing deadline. In today’s recovering economy, the IRS is reacting to taxpayers who are suffering financially due to job losses and other economic hardships.
“It’s always better to pay what you can, and show the IRS your intention to pay the rest of your tax liability. Taxpayers can e-file their returns through this final deadline,” said John Hewitt, CEO of Liberty Tax Service.
Borrowing the money, taking out a bank loan, or establishing a home equity line of credit are options to pay in order to meet the final tax filing deadline. Or taxpayers can ask the IRS for permission to make monthly installment payments by completing Form 9465, Installment Agreement Request, and attach it to the tax return. The IRS will approve or deny the request by sending out a written response. If the request is approved, the IRS will charge a fee that will be deducted from the first installment payment and will send instructions on how to make the monthly installment payments. Another available option to ensure timely payments is to have the funds directly debited from a bank account. The IRS may agree to negotiate a smaller installment payment for those currently in the program who are in dire economic straights this year.
Taxpayers can charge their taxes owed to a MasterCard, VISA, Discover, American Express Card or pay by using a debit card. A taxpayer can also opt to have overdue taxes deducted from their paycheck. An employer can fill out Form 2159, Payroll Deduction Agreement that can be filed with the tax forms to get this underway. Another option is paying online by going to http://www.PAY1040.com or http://www.officialpayments.com, or by calling 1-888-PAY1040 (1-888-729-1040) or 1-800-2PAY-TAX (1-800-272-9829). A convenience fee applies.
Some financially distressed taxpayers may quality for an Offer in Compromise. Under this OIC agreement, the IRS may agree to settle the taxpayer’s liability for less than the full amount of taxes owed. The IRS is not likely to approve an OIC if there’s evidence that the taxpayer could pay the full amount through the installment plan or another method. The IRS measures the “reasonable collection potential” (RCP) for payback by considering the value of the taxpayer’s assets including property, cars, other accounts and anticipated future income. A taxpayer can request consideration for an OIC by filling out Form 656, Offer in Compromise, or Form 656L, Offer in Compromise (Doubt as to Liability) and submit it with their tax forms.
About Liberty Tax Service
Liberty Tax Service is the fastest-growing retail tax preparation company in the industry’s history. Founded in 1997 by CEO John T. Hewitt, a pioneer in the tax industry, Liberty Tax Service has prepared over 9,000,000 individual income tax returns. With 42 years of tax industry experience, Hewitt stands as the most experienced CEO in the tax preparation business, having also founded Jackson Hewitt Tax Service.
Liberty Tax Service is the only tax franchise on the Forbes “Top 20 Franchises to Start” and ranks #1 of the tax franchises on the Entrepreneur “Franchise 500.” Each office provides computerized income tax preparation, electronic filing, and online filing through eSmart Tax.