I ran across this interesting video on the Wall Street Journal. It's an interview featuring the remarkable "Tax Lady," Ms. Roni Lynn Deutch. (I'm linking to her amazing blog, which has a plethora of great tax and financial advice.
In addition, Roni Lynn Deutch offers six options for the tax-wary Americans indebted to the IRS. Roni Deutch suggests resolving tax debts immediately in order to avoid burdensome penalties and interests that go with delays. After checking the numbers on the tax bill, one may choose from among these six options:
1. Pay in Full. Deutch says this is better than “IRS collections hounding you day and night, putting liens and levies on everything you own.”
2. Offer in compromise. If full payment is not doable, an offer in compromise, or paying a lump sum for a smaller amount than was originally owed, could help.
3. Installment agreement. The IRS will calculate based on your income less your “allowable expenses” to determine how much your monthly payment will be.
4. Streamlined installment agreement. Streamline installment agreements apply to tax bills under $25,000 and based on the amount to pay off taxes within five years or less.
5. Currently not collectible. The IRS will stop squeezing money out of you if you prove your money is exhausted on “living expenses.”
6. Wait it Out. Although tax debts expire 10 years from the date of assessment, this might be a gamble on your part since the IRS is shrewd and may extend the life of your tax bill.
Roni Lynn Deutch has written several articles in Women Entrepreneur, including how to prepare audit-ready tax returns and keeping good tax records.
And did you know Roni Lynn Deutch was the first girl to play in an all-boy's Little League in California? No kidding!
