I’m paying off the IRS for 2008 tax year (total is now up to $37k), and the interest keeps adding to the total owed. I owed for 2010 and paid that amount, but now owe $10k for 2011, due to too little withheld from my and my husband’s taxes. The initial job loss in 2007 is what caused our problem, and having to dip into 401k to survive.
So, the total owed is $47k.
Does the IRS always put a lien on your property if you owe more than $25k? We are hoping to make payments for a few months and then apply for a cash-out refinance to clear up the tax bills and other debt. We have almost 200k in home equity, but cannot get a mortgage if there’s a lien on the property, as far as I know.
We have filed all of our taxes, never missed a year. We are not trying to avoid paying, but we would like to clear up our mistakes and have a fresh start.
I would suggest that you reach out proactively and work closely with the IRS to create a repayment solution that works for you. The new IRS is not really one to be afraid of. You will find most people at the IRS to be both kind and helpful.
One consideration might be to explore a Lending Club unsecured debt consolidation loan for part of the debt owed to bring your balance below $25,000 with the IRS and that might make your repayment plan easier to accomplish with them.
But before you decide to do anything like the unsecured debt consolidation loan I’d suggest you have an open and frank discussion with the IRS and ask for their help and advice in coming up with a solution to resolve the past issues. If you can’t, come back and post a comment.
Please post your responses and follow-up messages to me on this in the comments section below.