You are not my taxman

November 15, 2023 7:51 PM

I had been paying a modest amount every month on my taxes for 4 or 5 months. Today I got a letter from the IRS saying pay in full by Dec 4.

I was just following instructions of the accountant I was referred to--start making payments.
You know you can't even reach these people in person/on the phone. There is something called tax advocate on this 3 page letter. Any other bright ideas? Surprisingly I am not panicked but am annoyed and I have enough other stressors coming up. Now they threaten to put a lien on my stuff. For $1200!

Hope you can help.

posted by Rumi'sLeftSock to Work & Money (14 answers total)

I found the IRS was very reachable and very accommodating when I had to set up a payment plan for a relative. I would call the number on the letter. If they are not reasonable, look into an Offer In Compromise (OIC). When you speak to the IRS, ask them about a payment plan. Use your previous (modest or not) payments as a demonstration that you are making a good faith effort to pay. My guess is that they sent the letter to protect their interests (natch), but also to get you to set up a formal payment plan and legally get your agreement. As part of the payment plan ask them to forgo putting a lien on your stuff as long as you adhere to the plan. This is not a major crisis.

Btw, that is not a threat to put a lien on your stuff. That is a simple statement that they WILL put a lien on if your either don't pay or don't come to an agreement on how to pay.
posted by JohnnyGunn at 8:12 PM on November 15, 2023 [9 favorites]

To be clear, you did not set up a payment plan with them, but just started making payments? Call them and ask to set up an official payment plan.
posted by soelo at 9:49 PM on November 15, 2023 [13 favorites]

When I was found wanting for a previous year’s tax, I called the IRS and spoke with one (1) very professional, knowledgeable, kind, and helpful individual who helped me put together an extremely reasonable payment plan for just about the same amount you owe. I would absolutely recommend giving them a call. You may need to be on hold for some time, but I didn’t get transferred around or any of that garbage. They’re just busy!
posted by potent_cyprus at 3:08 AM on November 16, 2023 [2 favorites]

Thirding that I have found calling the IRS to be a surprisingly pleasant experience.
posted by metasarah at 4:01 AM on November 16, 2023 [2 favorites]

You know you can't even reach these people in person/on the phone.

You can literally do both of those things.
posted by NotMyselfRightNow at 4:32 AM on November 16, 2023 [12 favorites]

I once had a big sum of arrears taxes thanks to somebody withdrawing money from his RRSP while still working. I was paying it off at about $300 per month and got one of those alarming notices... So I called them up to negotiate and had an embarrassing discussion with a tax person. He went over my household budget with me, to see if he could get me to pay more than that. I remember I told him firmly that the eldest kid, away at university was being sent so much a month for tuition and living expenses, and expected him to tell me that that was a discretionary expense, but he didn't object, just added it to his calculations. The sum I was sending may have been about the same as the installments I was paying on the taxes. When he got to the question, "And how much do you have budgeted for all clothing expenses each month?" and I replied. "Nothing. We aren't buying any new clothes until the debt is paid off," he paused and then wound down the interview.

He asked if I could manage $150 per month, and put me down as needing to pay that.

So don't be anxious about negotiating with them - their concern is that you will ghost on them, not to squeeze blood out of a stone. There is a very good chance all you need to do is get in touch with them to formalize what you are already doing.
posted by Jane the Brown at 4:50 AM on November 16, 2023 [2 favorites]

The myriad variable ways my husband's industry does payroll results in periodic surprises even when we thought we'd wildly overguesstimated for taxes, so we have quite a bit of experience with this. The payment plan process is fine, getting a hold of them is at best a matter of sitting on hold for a bit while you kill time on the internet. They're very nice, I have no idea what kind of calmness training they put these people through but I would like to go to it.

I would lead with, "Hi, I talked to a terrible accountant who vaguely referenced making payments instead of telling me 'CALL THE IRS AND SET UP A PAYMENT PLAN' so I had no idea I wasn't doing it right. I am sorry and I would like to make a payment plan now please."
posted by Lyn Never at 4:59 AM on November 16, 2023 [5 favorites]

How have you been sending your payment every month? There's specific forms and processes to identify which tax bill you're paying -- each year is an entirely separate 'account'. To the IRS it probably looks like you're paying your 2023 taxes early, not that you're paying your 2022 taxes late -- which is what the letter is about.

∞th that the IRS is absolutely your best friend if you call them up and tell them you want to pay your taxes. You absolutely can talk to a person on the phone and do everything via phonecall and they're actually really easy to get a hold of. I have heard of people making payment plans they can afford which stretch over multiple years. As long as the IRS knows money is flowing their direction they're good.
posted by AzraelBrown at 6:27 AM on November 16, 2023 [2 favorites]

I'd call them, but out of an abundance of caution, I'd use contact information from the IRS website and not from the letter (just in case there's some new weird scam going around).
posted by trig at 8:15 AM on November 16, 2023 [8 favorites]

Aside from the other good recommendations here, I recommend signing up for an IRS Online Account. Getting verified was a little bit annoying, but once you do, being able to see what numbers the IRS has in their records can be really helpful in discussions with IRS folks and accountants.

You can also apply for a payment plan with an Online Account, although I would follow the instructions in your letter instead if they suggest something else.
posted by grouse at 8:35 AM on November 16, 2023

If you owe less than $50,000, you can set up an online payment plan in 5 minutes, no financial disclosures, terms up to 6 years.
posted by dngrangl at 11:05 AM on November 16, 2023 [1 favorite]

Also, if you've been sending your additional payments directly to the IRS: make sure they know this before you set up a payment plan. For me, one year they moved an estimated payment that I'd sent in for next year, to apply to what I was short on the previous year. They likely can see your extra payments and can shuffle them for you as well to reduce what they think you're behind.
posted by AzraelBrown at 11:48 AM on November 16, 2023

Are you sure you aren't being scammed? You should definitely be able to reach the IRS by phone.
posted by mr_roboto at 2:59 PM on November 16, 2023

Have you been making the payments directly to the IRS, or through the accountant who told you to simply start making payments? Generally, you need to have something set-up with the IRS so they know how to direct the payments.
posted by Thorzdad at 4:27 PM on November 16, 2023