Does it really help if your accountant helps you with the IRS if you owe back taxes can they do anything?

Question

Does it really help if your accountant helps you with the IRS if you owe back taxes can they do anything? Is it better to be face to face; I know you can set those up; basically she was in a situation where her ex boyfried was telling her he was doing her taxes and never did and now we are married (me the new husband) and I got the 2 years done it was back in 04 and 05 and she owes like 15k; will the IRS just pound her with penalties and interest and everything; do we have any recourse and does an accountant really help you see all these ads on the TV about how they can help you; I just dont want to end up paying 25k instead of 15k; thans I appreciate it.

Answer 1

Presumably you hired an accountant to do the taxes correctly.

If you did them in haste, an accountant could review them to see if any remaining credits/deductions exist.

Otherwise, there's not much you can do.

The TV ads promise too much.  If there is no question that she owes the money, is young, healthy and has assets, the IRS is *not* going to accept an OIC.  The TV ad people will accept the money without really checking to see if she's eligible--JKHarris is in hot water over this.

Answer 2

It depends on the skill of the accountant but you can probably deal with the IRS yourself.  The IRS will charge intrest and penalty until the balance is paid in full or the debt is no longer collectable because the statute of limitation has expired (10 years from the time the return is filed).  Since these years were filed late the failure to file on time penalty will have maxed out and most of the damage has already been done.  IRS will try to get you to pay as much as you can by asking you if you can borrow the money or sell assets to pay the tax debt.  Unless you can borrow money cheaper than 9% you will probably want to pay the IRS (current intrest rate 6% + failure to pay on time .0025*12= 9%). To find the amount of her payment take the assessed balance (this is the pabance on the1st notice they sent you) and divide by 60 or aproximatnly $250 (15000/60).  This will not pay it off in 5 years because penalty and intrest will continue to accrue.  The only way to make this problem go away is to throw money at it.  

Helpful hints:

What caused her to this money?  Unless that situation is fixed she will always pay more than she will if she pays on time.  If she is self employed she must make estimated tax payments.

IRS won't deal with you unless she gives you power of attourney or she signs a release of information.

Is the tax liability correct?  This is where a good accountant or enrolled agent will help you.

You can keep the IRS out of your part of the refund if you file the injured spouse form with future returns.

Hope this helps

Answer 3

if u get a accountant they might be able to reduce your payment if you owe..yes the irs will get her with interest and late fees but there maybe a way out ask a professional

Answer 4

Don't hire anyone to do the work for you. If you do they over charge for that service they will provide which is:  Submit Form 9465 to IRS with a payment proposal.  You can do that your self.  IRS accepts 60 month IA so divide amount you owe by 60 and that is the minimum payment accepted.

Instead download Form 9465 and complete the form and mail to IRS.

Can I make installment payments on the amount I owe?

Yes. If you cannot pay the full amount due as shown on your return, you can ask to make monthly installment payments. However, you will be charged a one time user fee of $105.00, as well as interest on any tax not paid by its due date, and you can be charged a late payment penalty unless you can show reasonable cause for not paying the tax by the due date (April 15, 2008 for individual income tax returns) even if your request to pay in installments is granted. Penalty will be charged until it reaches 25% of the original balance due and interest will be charged until the account is fully paid. Before requesting an installment agreement, you should consider less costly alternatives such as a bank loan.

To request an installment agreement send Form 9465 (PDF), Installment Agreement Request, with your return or call [phone]. If you call you can also request a direct debit agreement or a payroll deduction agreement. You should receive a response within 30 days if you submit the form with your return. For more details on installment payments, refer to Tax Topic 202, What to do if You Can't Pay Your Tax, or Publication 594 (PDF), Understanding the Collection Process.

References:

Publication 594 (PDF), Understanding the Collection Process

Form 9465 (PDF), Installment Agreement Request

Tax Topic 202, What to do if You Can't Pay Your Tax

Are you aware that interest and penalties do not stop with an installment agreement/payment plan?  You can save money by paying the full amount you owe, as quickly as possible; to minimize the interest and penalties you will be charged.  Penalties and interest will continue to be charged on the unpaid portion of the debt throughout the duration of the installment agreement/payment plan.

Remember, the interest rate on a loan or credit card may be lower than the combination of penalties and interest imposed by the Internal Revenue Code.  It is best that you pay as much as possible before entering into an agreement. See the example showing how borrowing money to pay your taxes could cost you less than an installment agreement.

A Notice of Federal Tax Lien would also be avoided, thereby maintaining your credit standing.  Additionally, the installment agreement fee would not apply.

Paying your taxes in full, or partially paying your tax liabilities through liquidating or borrowing against real estate or personal property (bank accounts, stocks, bonds, 401(k) plans, or life insurance), would cost less than an installment agreement.