Do you think the IRS has a heart? Well, the Internal Revenue Service wants you to think so. Although the IRS has historically been cold-heartened and downright ruthless, it appears they recognize that many taxpayers are having difficult times financially. There can be a tax impact to events such as job loss, foreclosure, bankruptcy or tapping a retirement fund that may result in you not being able to pay your federal income tax. The IRS wants to help, sort-of, by providing this advice for those of you who can’t pay your taxes.

So what do you do if you can’t pay your federal taxes?

“The first thing to do is not panic. If you cannot pay the full amount of taxes you owe, you should still file your return by the deadline and pay as much as you can to avoid penalties and interest. You also should contact the IRS immediately to discuss your payment options at 1-800-829-1040. The agency may be able to provide some relief such as a short-term extension to pay, an installment agreement or an offer in compromise. In some cases, the agency may be able to waive penalties. However, the agency is unable to waive interest charges which accrue on unpaid tax bills” as is stated on the IRS website.

If you will owe a significant amount of federal taxes and can’t pay it, one of best things to do is consult with a tax attorney before you contact the IRS. The tax attorney will go over your situation, give the options available and make you feel more at ease. If you decide to hire the tax attorney, he can represent you in your case with the Internal Revenue Service

source: irs.gov