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Tax Planning/PAYING TAXES OVER TIME

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QUESTION: Richard Hi,  I need your help my mom is elderly and has to pay a significant amount of taxes. When I was preparing her taxes vouches were printed, 4 in total, how are thes used. Also its prints out a penalty amount,  Im not sure why since I will send the taxes in on time. Finally Im thinking about writing a letter and requestig for her to make payments over time. Do you know what the IRS looks at for over time payments, is this expensive.   I appreciate any help that you can give me. Thank you Ken

ANSWER: Hi Ken,
The vouchers are because your mom owes taxes for 2014 and the IRS assumes she will owe the same amount this year, 2015. So the vouchers, meant to prepay taxes that will be owed April 15th of 2016, may or may not have any use.

For the tax return, 2014, you are working on now. Be sure to get her tax return in on time, even if she can't pay it all. She can request a payment over time in writing with the return or wait (about 30 days) until the return is processed and call in (800-829-7650) for a payment schedule. Time payments are not overly expensive and since the bill must be paid it is important to make the agreement and then make the payments as promised.

Hope that helps.
RS

---------- FOLLOW-UP ----------

QUESTION: Rich thank you for your help,  is there a specific form that I need to send in with a letter.  Thanks again, Ken

Answer
I would staple a strip of paper where the W2 usually goes and put in all caps that this is a request for an installment agreement on the balance owed. I would also pay as much as possible with the return. Then, because the IRS sometimes takes a long time, I would call in 30-40 days and have your mom request a payment arrangement. She can authorize you to speak for her, either on a one time basis or always. If it is "always" be sure the representative notes that in her file. Usually you get up to 5 years to pay on your balance due.

Tax Planning

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Richard S

Expertise

My expertise is in collecting past due taxes and tax returns. While at the IRS I worked on wage and bank levies, liens, Offer in Compromise, late filing and payment agreements every day. I spoke with over 20,000 people concerning their issues while I worked there (just retired).

Experience

Ten years working for the the IRS in Collections and tax return review. Worked with over 20,000 people on their IRS issues. Explained their options and usually worked out a solution while they were on the phone.

Education/Credentials
Masters Degree from Iowa State in Ames.

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