A Friendly IRS???
Posted by Wally Ross on Tue, Jul 13, 2010
Written by: Jordan Baigas, Office Manager
When a client has a tax liability our accountants will often help them set-up a payment plan with the IRS. In this regard, last month a client of ours received the following notice:
In the past, even if only one payment was missed the entire installment agreement was terminated and all outstanding tax liability was due immediately. Now, as it appears from this notice, not only does the Fed "understand" the hardships of current economic conditions, but they even "might be able to reduce monthly payment."
Shocked? Definitely. Humored? A bit. But, hey, we aren't complaining. If the IRS has taken a friendly-turn it is welcomed whole-heartedly. However, once Uncle Sam starts negotiating your tax payments, doesn't it make you wonder? Why is the IRS so desperate for money? Shouldn't the administration be cutting taxes for everyone? Should I adjust my W-4 so that less is withheld from each paycheck in case there's no money for a refund in the future?
Honestly, only time will tell. We suggest that you have discipline in your savings and always use your money wisely. And, who knows, maybe the IRS will continue to be as understanding when you get in a sticky situation.