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Author: EarlyToRise Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 120809  
Subject: Re: How to Pay ... ? Date: 4/15/2008 12:28 PM
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Any thoughts?

There's no easy choice here, but I will give my personal experience. In April 2005 I was in a pretty similar situation. I happened upon this article:

http://www.fool.com/personal-finance/taxes/2004/04/02/cant-pay-your-taxes.aspx

Specifically, I followed this advice:
"First and most important, don't let your inability to pay your tax liability in full keep you from filing your tax return properly and on time. Include as large a partial payment as you can. Simply filing your return, even if you don't include full payment, can save you substantial amounts in late-filing penalties."

And this advice:
In about 45 days, the IRS will send you a bill for the remaining balance due. If you can pay it then, do it. If you can't, then send as much as possible (again, reducing penalties and interest) and hang on. In another 45 days or so you'll get another bill from Uncle Sam. Hopefully you can then pay the balance due.

You'll likely be able to go through two or three of these billing cycles before the IRS bugs you for some type of formal payment method. But if you can clear up the matter using bigger chunks of payments over two or three IRS billing cycles, you'll pay some interest and penalties, but you'll save some time by not being required to complete additional IRS paperwork.


It worked for me. I sent about 1/4 of what was due on April 15, and about 1/4 of the remainder each time I got a letter from the IRS, which was approximately every 45 days.

It ain't ideal, but it gives you some liquidity.

ETR
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