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What To Do When You Owe Money For Back Taxes To The IRS (Whether The IRS Knows It Or Not)


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The IRS is the most aggressive, powerful debt collector there is. If you have not filed tax returns, file them. A serious illness is no excuse for not filing. 

If you receive notice from the IRS that you owe money, do not ignore it. Ignoring the IRS will only prolong and worsen your situation.

This article deals with the situation in which you owe taxes, but cannot readily pay them. Following is a brief summary. For more about each subject, see the other sections of this article.

There are alternatives for handling tax debt other than paying it all at once, including an "Offer In Compromise" and asking for a "Delay." In this situation, your diagnosis itself might make a resolution of your tax problems easier. Whatever method you use, you can also ask for a waiver of penalties.

When you speak with the IRS, there are guidelines that will make it more likely that your experience will be positive - or at least that you won't shoot yourself in the foot.

If you can't reach agreement with the IRS, appeal.

Regardless of what method you use to deal with the IRS, we suggest that you always be honest. By coming clean about what you owe, describing your ability (or inability) to pay, and communicating the fact of your illness, you will be able to resolve your tax problems with much less stress and a much better outcome.

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