If you owe fed­eral taxes and can’t pay, make the IRS your first call.

The Washington Post Sunday - - BUSINESS - Michelle Sin­gle­tary

If you owe fed­eral taxes and can’t pay them, the first thing you should do is call the IRS.

Don’t call the num­ber you see on your tele­vi­sion screen or the one you hear in a ra­dio ad. Make the IRS your first stop so that you don’t fall prey to a scam. Be­cause, con­trary to the claims on the com­mer­cials promis­ing quick re­lief, pri­vate com­pa­nies are not likely to get your tax debt re­duced to pen­nies on the dol­lar.

And to be clear, I’m not talk­ing about a tax­payer who’s fight­ing the IRS over the le­git­i­macy of a de­duc­tion. If you’ve got a com­pli­cated tax sit­u­a­tion, you may need to hire a cer­ti­fied pub­lic ac­coun­tant or an at­tor­ney who spe­cial­izes in such tax cases.

But if your is­sue is an un­paid tax debt that you’ve been ig­nor­ing, just con­tact the IRS.

By March, the IRS plans to add about 850 em­ploy­ees spread out in 19 lo­ca­tions to staff key col­lec­tion tele­phone lines. An ad­di­tional 1,000 sea­sonal work­ers will also be hired. The work­ers are be­ing spe­cially trained to han­dle calls from peo­ple who have re­ceived bal­ance-due notices for un­paid taxes, ac­cord­ing to Eric Hyl­ton, head of the IRS’s Small Busi­ness/ Self-Em­ployed Divi­sion.

Dur­ing a con­fer­ence call with re­porters, Hyl­ton said 200 of the jobs are be­ing funded from rev­enue gen­er­ated by money col­lected through pri­vate agen­cies hired to col­lect cer­tain out­stand­ing, in­ac­tive tax debt.

“The new hires are part of a larger ef­fort by the IRS to fo­cus on help­ing tax­pay­ers who are hav­ing trou­ble pay­ing their tax bills,” Hyl­ton said. “If peo­ple can’t pay and start re­ceiv­ing notices from the IRS, it is crit­i­cal that they reach out as soon as pos­si­ble in this process. In­ter­est and penal­ties can quickly ac­crue. Things get worse the longer peo­ple wait.”

The IRS em­ploy­ees an­swer­ing the col­lec­tion lines will be able to help folks fig­ure out their pay­ment op­tions. The vast ma­jor­ity of peo­ple call­ing will find they qual­ify for a stream­lined in­stall­ment agree­ment, said Dar­ren Guil­lot, deputy com­mis­sioner for col­lec­tion and op­er­a­tions sup­port in the Small Busi­ness/ Self-Em­ployed Divi­sion.

Guil­lot re­counted a re­cent call at a cen­ter in Fresno in which an IRS em­ployee as­sisted an elderly tax­payer. In less than 25 min­utes, the IRS worker was able to de­ter­mine the woman was a hard­ship case.

“As much as this tax­payer wanted to set up a pay­ment ar­range­ment, she pro­vided us with suf­fi­cient in­for­ma­tion so that we could coun­sel her to­ward pay­ing what­ever she felt she could af­ford,” Guil­lot said.

If you’ve got­ten a bal­ance-due no­tice in the mail from the IRS, you will find a toll-free num­ber you need to call within the let­ter.

If you’re still too scared to call the IRS, go on­line to set up a pay­ment agree­ment. Search for “Pay­ment Plan” at irs.gov, and you’ll be di­rected to the on­line ap­pli­ca­tion to pay off your bal­ance over time. A long-term pay­ment plan is avail­able to those who owe $50,000 or less in com­bined tax, penal­ties and in­ter­est. You can set up a monthly pay­ment agree­ment for up to 72 months.

You can also ap­ply for what’s called an “Of­fer in Com­pro­mise” or OIC. This pro­gram is in­tended to help peo­ple who are so fi­nan­cially strapped that it’s un­likely the agency could col­lect all that the gov­ern­ment is owed.

An OIC al­lows you to set­tle your tax debt for less than the full amount owed. Search for “OIC” and then use the pre­qual­i­fier tool to check your el­i­gi­bil­ity.

“It’s quicker, it’s more ef­fi­cient and it’s less in­tru­sive for Amer­i­cans to go on­line to irs.gov and re­solve their tax li­a­bil­ity all by them­selves with­out any in­ter­ac­tion with the IRS and a per­son hav­ing to wait on the phone if they owe $50,000 or less,” Guil­lot said.

Once, dur­ing a bud­get ses­sion, a woman I was work­ing with ad­mit­ted she owed the IRS about $25,000.

She’d been avoid­ing re­spond­ing to the let­ters the IRS had been send­ing.

“You’ve got to take care of this,” I urged.

“I’m scared,” she said, shak­ing. “I don’t have that kind of money.”

Af­ter some coax­ing, she called the num­ber listed in one of the let­ters. In less than 15 min­utes, she was on a pay­ment plan she could af­ford. I even per­suaded her to move in with her sis­ter so she could re­duce her ex­penses and get rid of the tax debt even faster than the plan she had set up with the IRS.

Don’t let your fear get in the way of set­tling your tax debt. Help that won’t get you scammed or cost you thou­sands of dol­lars is just a call or click away.

Have a ques­tion about re­tire­ment or per­sonal fi­nance? Join Michelle for an on­line Q&A every Thurs­day at 12 p.m. East­ern time. Read­ers may write to Michelle Sin­gle­tary at The Washington Post, 1301 K St. NW, Washington, D.C. 20071 or michelle.sin­gle­[email protected]­post.com. To read pre­vi­ous Color of Money col­umns, go to http://wapo.st/ michelle-sin­gle­tary.

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