It’s a somewhat painful road to take, but people manage to deal with their own taxes issues when they are under $10,000 and do not need a tax attorney to offer tax help services to them. And so can you. That’s what a person who called me and explained they owed about ~$8,700 in taxes. I gave them a frame work of how he could solve his problem without me since the tax debt was small. He worked out an installment plan with the IRS and paid his debt off in about a year. The interest rate is compounded (interest on the accumulated unpaid interest and also on the original principal) that will add up, and tax penalties for not paying the taxes on time, so its advisable to pay off the debt quickly. The steps are:
a) Call IRS or state as soon as you realize you can’t repay your tax obligation.
If you filed your tax return, and determined a tax liability, deal with it immediately. Don’t wait. It’s going to make things worse if you don’t. Besides your original tax debt you may end up owning loads of back taxes, tax levies and penalties. Those add up pretty fast! Get ahead of the problem as quickly as possible. If you owe a lot, get tax help from a qualified professional.