Los Angeles Times

Don’t hire a firm to set up an IRS payment plan

- By Liz Weston Questions may be sent to Liz Weston, 3940 Laurel Canyon, No. 238, Studio City, CA 91604, or by using the “Contact” form at asklizwest­on.com. Distribute­d by No More Red Inc.

Dear Liz: I fell behind on making my quarterly estimated tax payments for a long list of reasons, and when I file my return, the IRS will find out. I have heard they can seize your IRAs, which I have but do not want to cash out to pay.

I found a service on the Internet with good references and no bad reviews. The company said it can help get a payment program and often a reduction in the amount owed. It seems worth a couple thousand dollars to try it. Your thoughts?

Answer: There are a number of reasons why a company might have no negative reviews online. Maybe it’s a great company. Or maybe it’s not, but it just launched or took over a legitimate firm with the intention of fleecing as many people as possible.

Don’t be persuaded by the idea that the company might reduce what you owe. Settlement­s aren’t impossible, but the taxpayers who get them (typically after long and drawn-out battles) are those whose financial situations are dire and not expected to improve.

The IRS has many, many ways to collect its due and won’t just roll over because you don’t want to pay.

In any case, you don’t need to hire someone else to set up a payment plan for you.

If you owe $50,000 or less as an individual or $25,000 or less as a business, you can request an installmen­t plan online and get an immediate response. If you owe more than those amounts, you can request an installmen­t agreement using Form 433F.

The costs are low. If you can pay your balance within 120 days, the plan is free. Otherwise you’ll pay $52 for a direct debit agreement or $105 for a standard or payroll deduction agreement. Lower-income taxpayers can get a reduced fee of $43.

For more, visit http:// www.irs.gov/Individual­s/ Payment-Plans-Installmen­t-Agreements.

If you can’t pay your balance in the allotted time, you may need to hire some help. You can get referrals to CPAs who can represent you in front of the IRS from www.aicpa.org.

Website for free credit report Dear Liz: I was trying to get my free credit report as you suggested in a recent column. I was asked to pay $1, which made me very uneasy. Why do they do this?

Answer: The fact that you were asked to pay for your free credit report — even a nominal amount such as $1 — shows that you went to the wrong site.

That can happen if you typed the correct site, www.annualcred­itreport.com, into a search engine, rather than into your browser address bar, and didn’t carefully review the options before you clicked.

These look-alike sites are supposed to disclose that they’re not the real thing, but sometimes those disclosure­s are easy to miss.

The real site notes that it’s the only site for free credit reports and is authorized by federal law. You don’t need to provide a debit or credit card to get your reports, although you will have to provide identifyin­g informatio­n such as your Social Security number.

Is it time to sell town home? Dear Liz: I am a single woman 10 to 15 years away from retirement. My town home will be paid off next month. Does it make better financial sense to sell my town home to avoid significan­t monthly homeowners associatio­n fees and invest in a single-family home?

Answer: It depends. Many single-family homes, particular­ly in newer developmen­ts, also have sizable HOA fees. Even when that’s not the case, you can face significan­tly higher repair and maintenanc­e costs with a single-family home compared to a town home.

You also need to factor in the costs of selling your home and moving. Real estate commission­s can eat up 5% to 7% of the value of your home, and moving expenses can add thousands of dollars to your costs.

Now would be an excellent time to consult a feeonly financial planner who can review your plans for retirement and discuss your alternativ­es.

Mistakes you make in the years immediatel­y before and after retirement can be particular­ly devastatin­g, so make sure you have an objective second opinion.

 ?? J. David Ake
Associated Press ?? IF YOU OWE the IRS $50,000 or less as an individual or $25,000 or less as a business, you can request an installmen­t plan online and get an immediate response.
J. David Ake Associated Press IF YOU OWE the IRS $50,000 or less as an individual or $25,000 or less as a business, you can request an installmen­t plan online and get an immediate response.

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