Liberty Tax Explains Options for Taxpayers Who Owe
IRS Has Expanded the “Offer-in-Compromise” Program
(Virginia Beach, VA) Liberty Tax encourages unemployed and financially challenged taxpayers who owe this year and are worried about their ability to pay to examine enhanced options offered by the IRS. The IRS has expanded the offer-in-compromise program that allows a settlement of the taxpayer’s tax liability for less than the full amount owed based on the individual’s current financial situation, income and future earning potential. Previously, the IRS determined the amount of the offer in compromise on the taxpayer’s earnings in prior years. Other options include paying the tax debt with a loan or credit card, or agreeing to pay through installments.
“The IRS has pledged to work with struggling taxpayers who make the effort to try and pay their taxes. It’s always advisable to pay what you can, and file on time or request an extension. An extension of time to file a tax return still does not constitute an extension of time to pay any tax liability. Penalties and interest accrue from April 15 if the tax liability has not been paid,” said John Hewitt, CEO of Liberty Tax Service.
The IRS will grant an automatic six-month filing extension to taxpayers who file a timely extension request. Taxpayers do not need to provide a reason for their request. Individual taxpayers need to file Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, by April 15 to be granted a filing extension until October 15.
Taxpayers can request permission to make monthly installment payments by filing an installment agreement form with their tax return. If you are not currently on an IRS installment plan, complete Form 9465, Installment Agreement Request, and attach it to the return. To limit penalty and interest charges, the taxpayer should pay as much of the tax due as possible when sending in their return.
If the request is approved, the IRS will charge a fee of $105, unless direct debit is used ($52) or there is a reduced fee for individuals with lower incomes ($43). These payments must be made on time, and the taxpayer must agree to meet all future tax liabilities. One available option to ensure timely payments is to have the funds directly debited from a bank account.
Taxpayers can charge their taxes owed to a MasterCard, VISA, Discover, American Express Card or a debit card. They can also pay on the Internet by visiting www.PAY1040.com or www.officialpayments.com, or call 1-888-PAY1040 (1-888-729-1040) or 1-800-2PAY-TAX (1-800-272-9829). A convenience fee applies.
About Liberty Tax Service
Liberty Tax Service is the fastest growing retail tax preparation company in the industry’s history. Founded in 1997 by CEO John T. Hewitt, a pioneer in the tax industry, Liberty Tax Service has prepared over 7,000,000 individual income tax returns. With 41 years of tax industry experience, Hewitt stands as the most experienced CEO in the tax preparation business, having also founded Jackson Hewitt Tax Service (NYSE:JTX).
Liberty Tax Service provides computerized income tax preparation, electronic filing, refund loans, and online filing through eSmart Tax. Each office offers customers audit assistance, a money back guarantee, and free tax return checking. The Liberty Tax Service franchise opportunity is #9 on the fastest growing franchises list of the 2010 Entrepreneur “Franchise 500.”