I am unemployed and have exhausted my benefits. If I owe tax, is there assistance available?

Thank you so very much for the EXCELLENT answers you guys gave me. I really appreciate the information.

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5 Responses to “I am unemployed and have exhausted my benefits. If I owe tax, is there assistance available?”

  1. Mike W said:

    There are multiple IRS resources to help the unemployed:

    Publications to assist unemployed taxpayers

    Publication 4128 , Tax Impact of Job Loss
    Publication 4128(SP), Tax Impact of Job Loss (Spanish version)
    Publication 4763, Job Related Questions During an Economic Downturn
    Publication 4763(SP), Job Related Questions During an Economic Downturn (Spanish version)

    Assistance with filing and paying taxes

    If you have troubles paying your tax bill, contact the IRS immediately. There are steps we can take to help ease the burden. You should file a tax return even if you are unable to pay so you can avoid additional penalties.
    Free Tax Help
    Publication 1546, The Taxpayer Advocate Service at the IRS How to Get Help with Unresolved Tax Problems
    Payment Plans, Installment Agreements
    Offers in Compromise
    IRS Help for Financially Distressed Taxpayers

  2. Judy said:

    If you’re asking if the tax will be waived or if there are grants to pay it, no. But you can set up a payment plan if you can’t pay it all at once.

  3. Carl said:

    Join the crowd! A lot of people are in this boat now.

    Unfortunately there is no assistance available specifically aimed at helping people who find themselves in this situation.

    Don’t forget that there is a substantial amount of your unemployment that is not taxable. That is a new rule for tax year 2009.

    If you owe tax I recommend you make a “good faith” payment with the IRS. You may set up a payment plan by filing Form 9465. However, there is a fee to apply for this and penalty and interest apply until the tax debt is paid off. The debt must be resolved by 60 months. Payment plans are subject to IRS approval.

    Some states have awful penalties associated with a balance due. The rates are so high that a person might decide to pay the state off first – in Michigan (for example) the penalty and interest can quickly become 25% of what you owe and potentially much more than that…If faced with the raw fact of paying the Internal Revenue Service OR the state – pay the state first…

    The worst case is to not file. There are penalties for failure to file that can be avoided – even if you can not make a “good faith” payment or pay the whole balance due. File the tax return, then sort out alternatives over time…

    Some tax preparation services offer programs through banks that are set up so that the bank pays the balance due and the taxpayer repays the bank. This is worth checking because it is an alternative.

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  5. Brianna Dearmore said:

    Excellent article. I’m at present facing some of these challenges as well.




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