I recieved a letter in April telling me that I had a tax difference from 2006 and that I owed 1100 dollars?

Question

I set up a payment plan with the irs and I thought that they would start to take the payment out of my checking account in late june. I recieved a letter about a week ago with another letter that I have to send in to put this aggrement into affect. Will my rebate check go towards the debt or will I recieve it because my contract with the irs isnt in effect yet?

Answer 1

I recommend that you do not send in the agreement.

The IRS will charge you $105 to set up the installment agreement.  Your rebate will be used to pay down the balance due.  You would then owe at most $800.

Just send in the money on your own, by writing them a check every month.  Or get a cash advance on a credit card, or other unsecured loan.

You are not required to enter into an installment agreement.

Answer 2

Your rebate will be offset to what you owe.  It may not make sense to pay the costs of an installment agreement to pay the difference.

Answer 3

Your rebate will most likely be taken toward what you owe.

Answer 4

When you received letter from IRS about tax difference, first thing you should do to to make sure that changes made by IRS are correct. If you have a question, to aks IRS.

If you have tax due, make sure to set up a payment plan.

Answer 5

It depends on whether or not the additional tax has been assessed yet, not if you have an agreement or not. In this case it's quite possible that it has not been assessed. The only way to know for sure is to call the IRS. If it has been assessed, the rebate will offset to the balance.