IRS Tax Bill
What should you do when you get a bill from the IRS? We get asked this question a lot because it’s very stressful to owe the government money and to now have enough money to pay that money. Whether, it is because you over claimed too many tax allowances on your taxes or because you simply needed to pay for living cost that deprived you of the ability to pay your taxes – you need to address and figure out what to do when you get a bill from the IRS.
The first thing you need to do is look at it. Read it and see if it is correct and valid. Don’t ignore it. That is the last thing you want to do is to ignore the IRS. So deal with it right away and read it and see if they are right or not. If it is not right then gather copies of your bills, records, tax returns. Whatever, you need to prove or to demonstrate that the bill is incorrect.
After you gather all your evidence start putting together an explanation of why their tax bill is incorrect. Look through the tax bill and see how they want you to respond if you dispute the bill and follow those directions. Usually, a letter diagramming your argument and supporting documents will be sufficient and request to be submitted in the mail.
Send that information with proof of delivery and keep a copy for your own records.
If your tax bill is correct then you should pay the bill as soon as possible. You can write a check and pay the IRS. Or you will need to look at other payment sources like selling stocks, bonds, gold, silver and etc to come up with the money to pay them. You can also get a loan or pay with your credit card. You can also take some money out of your 401k plan (but bear in mind that you will incur penalties for early withdrawal).
If you can’t pay the entire amount owed in full, the IRS will tend to work with you and allow you to pay through direct debit from your bank account or saving accounts on a monthly basis. You can consent to a payroll deduction, whereby a agreed upon amount is deducted from your paycheck, or you can agree to make monthly payments to the IRS to pay off the amount owed to the government.