Balance Due But Can't Pay now

[Guest Taxed]

I am drawing a blank on the form # and IRS.Gov search was no help.

My client owes around $800 in balance due and can't pay by 4/15 BUT she is suppose to collect over $1500 in back child support in May and this was confirmed by her lawyer.

I thought there was a form that allowed a taxpayer to pay in full balance due within 90 days for hardship cases without dong installment agreement. Part of Obama's new initiative i read somewhere.

She does not want to pay the 102 to setup installment agreement.

What is that form that needs to be submitted with the return?

[michaelmars]

You can set up for paper check and then she will get a bill in a few weeks asking her for her check, she could pay it then. very small penalties on $800 one month late.

[Lynn EA USTCP in Louisiana]

None that I know of other than the 9465 for the formal installment agreement.

She'll just pay the balance due when the bill arrives in about 6 weeks.

[Jerry W]

Try Form 9465

[Guest Taxed]

Thanks guys. I did a google search because something told me there is such a form. Will IRS form 1127 Application to extend time of payment due to hardship work? Anyone have experience with this form.

I just want t make sure I don't give bum advice and have this poor lady pay penalty and interest.

[SFA]

You can set up for paper check and then she will get a bill in a few weeks asking her for her check, she could pay it then. very small penalties on $800 one month late.

I agree with Michael. I have not used Form 1127, but looks like it takes time to complete. Depending on what you charge, you may want to calculate the late payment penalty first and compare it to the effort of filling out F1127.

[Catherine]

What I have told clients who cannot pay now but who will be able to in short order (1-3 months) is to send int eh e-file with the "paper check by mail" payment checked, and send in the coupon along with whatever they _can_ pay - even if it's just $50. They'll get back a letter saying you still owe $XXX plus $X interest. If they can pay off in a couple of those iterations, go for it.

I have never had a client report problems with this method. Anything longer than about 3 months and I recommend an installment agreement.

[joanmcq]

I've done this too. The IRS will even recommend it (the 120 day pay), rather than doing an installment. Interest & penalty on $800 for a month or so will be minimal.

[Guest Taxed]

Form 1127. I read the instructions because i have never used this form before. It appears that you have to provide a reason to IRS why paying the balance due right now is an undue hardship and give them a statement of assets and liabilities and bank statements. They may grant you up to 6 months to pay with interest charge, NO penalties or user fees.

In my client's situation she is collecting unemployment and did not have taxes witheld. Her bank balance is less than $10 at the end of the month. She is pretty much living check to check now. No assets, she rents and the landlord has given her a grace period to pay 2 months rent. Landlord is willing to provide a statement that if she had kicked her out due to rent being late she would be homeless!

If this is not hardship I don't know what is. I waived my fees this year because of her dire financial situation.She went to a legal clinic to get help with back child support that her boyfriend owes her. Her child is now 18 and no longer lives with her.

I am going to try 1127 and see what happens. I think tax pros should try this form in similar cases. It appears to be a hidden form!

[Lloyd Hudson]

If the client has the time,m I have them call and get the 120 day option. Otherwise as it has been stated...wait on the bill.

[Guest Taxed]

First time used form 1127. Did a paperfiling with the documents they needed as proof. Let's see what happens. If it gets kicked out will go for installment agreement.

[SCL]

You can set up for paper check and then she will get a bill in a few weeks asking her for her check, she could pay it then. very small penalties on $800 one month late.

mm and others have the answer for this small fish (and even for bigger fish).

i avoid the installment process...too much irs bs (unless balance due is really big).

efile the return.

pay what you can by 4/15 on fm1040v.

wait for irs statement.

pay off what you can.

rinse and repeat.

payoff within a year or so (plus an interest charge).