I can’t pay my tax bill: Are there any options for me at this late date?

It’s October. My favorite time of the year. The holidays are coming fast and will be here before you know it. The cooler weather should be here soon. Plus, October is the month that I first met my wife, now a long, long time ago (but she still looks as beautiful as the day I met her).

October is also the last month of the official tax filing season. The extension for individuals expired Oct. 15. Of course, many people who finish their tax returns at this time of the year owe money. Yes, that sucks for them. It sucks even more when they do not have the money to pay that tax bill.

This can happen for many reasons. I will give you a few examples of how people get into this pickle:

  • They changed employers and their new Form W-4 did not have enough federal withholding taken out.
  • They could have changed employers and now they work for someone who pays them on a 1099-NEC as an independent contractor (this is a whole separate issue on whether this is appropriate or not). Therefore, there is usually not any federal withholding paid into the IRS.
  • Business could have been doing well before and now it is not when the tax is coming due.
  • They are selling a property with a large taxable gain, but not getting any cash out at the sale.

So, what is a person (or business) to do? Well, fortunately there are many options to choose from; however, please note that the options can only apply if your facts and circumstances allow for it.

Most people will fit into the bucket that allows them to fully pay their tax, penalties and interest over a payment plan. This is typically paid over 72 months. Depending on the dollar amount you owe, you may not have to provide any forms or documents to set this up.

It may be that you can pay some payment but not the full payment that allows to pay it in full. The IRS can allow you to enter into a partial payment plan. If this is the case, the IRS is going to need Form 433-A for individuals or 433-B for businesses along with A LOT of documentation. They are going to vet and confirm the information you provide, so please be honest.

If you do not have any (or much) equity in assets and you do … Continue reading

Podcast Episode #22: 5 Reasons NOT to Start a Tax Resolution Practice in 2021

I’ve been pontificating upon the virtues of starting a taxpayer representation practice for 10 full years now. Having built two firms, I’m incredibly biased in regards to the pros of adding this lucrative service to your tax practice. But there certainly are cons to it, also. Tax resolution isn’t a good fit for every tax professional, and in this episode of the podcast, I explain five specific reasons why you might not want to get involved in taxpayer representation.… Continue reading

Podcast Episode #21: The Price is the Price


Ever had a client demand a discount?

Ever had a client ghost you on an invoice balance after the work was already done?

Ever cut a client a break on fees because of [insert random excuse]?

As a business owner, one of your jobs is to set your fees.

You determine this based on factors such as your overhead, how much profit you desire, and what your local market will bear.

You determine this. YOU. You set your fees. Not your staff, not your clients, not your relatives, not your competitors. YOU.

In this week’s episode of The Profitable Accountant Podcast, Dan Henn, CPA and I discuss this important issue of maintaining the integrity of your fee schedule. This is 38 minutes that you’re definitely going to want to listen in on.… Continue reading