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Money SavvyFinancial FindsA Taxing Dilemma If you don't have cash on hand to pay your 1998 tax bill, don't panic! File a return anyway. Failing to file is a more serious offense than failing to pay. When you fail to file, there's a penalty of 5 percent a month or any fraction of a month, plus other interest and penalties. So now you've got to figure out how to come up with balance you owe. The simplest solution is to get a loan from the federal government by filling out the installment agreement request, Form 9465. Attach it to your return and indicate an amount that you intend to pay each month. The IRS will let you know within 30 days if your plan is acceptable. Interest and penalties will also be due. If your plan is accepted, the IRS will bill you each month. If you don't want to borrow from the government, you might get a personal loan to cover your bill. If you use a home equity credit line, you could even get a deduction for the interest. If you truly cannot pay your taxes, you may be able to make an "offer in compromise," which allows you to settle your tax bill for something less than what you owe. What's a reasonable offer? Review the files at your local district IRS office to see what kinds of offers have been accepted. If you have a problem that seems unresolvable, call your local IRS office and ask for a problems resolution officer (PRO), a taxpayer advocate employed by the IRS to solve dilemmas. Remember that taxpayers do have rights! Check Your Return The most common mistake people make on their tax returns is the simple math error. Some other key mistakes to avoid:
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