Unpaid 2010 federal taxes

[Opti]

Can someone tell me the IRS's process for collecting unpaid federal taxes? Last year was the first time I had unpaid federal taxes and I filled out the paperwork to pay off what I couldn't at the time by October which was the latest option according to the paperwork that I had.

I filed the paperwork with hope as at the time the only employment I had was unscheduled per diem which was between $60 to $120 a month gross pay. I was chasing a job which was close to a position I had before my layoff which would have enabled me to pay the owed taxes before October although not easily. I did not get the job. I later got a job that paid less than unemployment which will end in November - the actual date is now unclear.

I received a CP504 form which indicates they may seize my state tax refund. While I wish they wouldn't, it will be small less than $100
if it exists at all. My federal taxes paid in this year will not fully cover
my owed taxes even if it all goes to the government. At the moment
my earned income for the year is low enough I probably have no federal tax liability.

What should I do? What will probably come next? I am actively searching for a new job and may be moving several states away to
live with my Dad because my savings are drained so no job means
being unable to pay rent let alone catching up on utility bills and my federal taxes.

[Peace77]

I have not been in this position. However, You will not get any tax refunds and you will eventually get a bill for the amount owed.

The IRS website www.irs.gov/individuals/article/0,,id=241919,00.html?portlet=101 says: What if I don't pay?

The IRS is legally required to take certain steps to collect your balance due account.

Your refund can be used to offset your bill.
A federal tax lien can be filed against your property.
Your salary/accounts can be seized through a tax levy.
You can be served a summons to provide information.

From www.irs.gov/taxtopics/tc201.html

If you are unable to pay anything because of financial hardship, we may temporarily suspend certain collection action, such as issuing a levy, until your financial condition improves. The IRS may, however, file a Notice of Federal Tax Lien while your account is suspended. Please call the phone number listed on your bill to discuss this option. Interest and late payment penalties will continue to accrue while you make installment payments or while collection is suspended.

See 9 tips for those who owe www.irs.gov/newsroom/article/0,,id=172694,00.html

What can you do to increase your income? Can you work evenings or weekends at a restaurant or retail store or do odd jobs?

[Deleted]

You need to write a letter in, explain your situation & request a payment plan at $x per month (amount you can and will pay without fail). You need to do this quick so they don't start blitzing you with penalties.

[bring in the new year]

Oct 22, 2011 9:59:08 GMT -5 @rockit said:

You need to write a letter in, explain your situation & request a payment plan at $x per month (amount you can and will pay without fail). You need to do this quick so they don't start blitzing you with penalties.

Also, it used to be that they would let you make nominal payments just to show good faith. If you get that offer, take it.

You say you have current withholding, are you expecting a refund next year?

Rock it, if she is expecting a refund, should she let them know that as well? I'm thinking if they know that she's at least current on this year, it might put her in better standing.

[Opti]

I did get bills as part of the tax agreement. However I have nothing I can afford to pay at this time as I've had to become behind on utilities because of necessary tax withholding. (See Math and You my new book on explaining why one's income does not magically expand to pay all bills and the infamous blood from a turnip explained.)

I did just mail a letter in explaining my situation but given my current temp job ends soon and I don't have another one lined up yet promising money I don't have per month is a stupidity I'm not willing to do.(Last time I had hope and odds on my side. Maybe even
some savings left.)

Hope my reply is not too snarky but I am looking for someone who knows more than I do about this situation. I have done my own taxes since age 16 including when I started a freelance business that
didn't accomplish much. I intentionally made sure there would be sufficient federal withholding this year even though I knew it would put needed car repairs and keeping current on any bill that wasn't rent at risk.

Was hoping for a tax accountant or CPA to post. Maybe later?

[mwcpa]

"Can someone tell me the IRS's process for collecting unpaid federal taxes? Last year was the first time I had unpaid federal taxes and I filled out the paperwork to pay off what I couldn't at the time by October which was the latest option according to the paperwork that I had."

If you timely filed your income tax return in April (an extension merely gives one more time to file, it is not a request for more time to pay) you could file a form 9465 to request an "installment agreement." An installment agreement is like a loan with the IRS (it comes with a lot of strings).

If you did not file the 9465 do it now or are delinquent in payments under an agreement then you should call the IRS, explain your unique facts and circumstances and continue to make some form of payment (to show good faith).

If you do not pay, the IRS has many means of recourse, including, but not limited to seizing future state and federal tax refunds (the federal refunds of the future WILL be used to offset past debts), filing of liens, placing a levy on one's bank accounts, garnishing wages from employers, etc.