Posted on September 3rd
Many times people don’t have a clue how much they owe the IRS. In fact, they believe it is so much that if they even call to inquire the IRS is just going to carry them off to debtor’s prison. And you can forget going to the local IRS office in person to see how much you owe because then you are just handing yourself over to them on a silver platter – right?
Absolutely not. There is no debtor’s prison and just owing the IRS money is not a crime. In order for you to make an informed decision about how to resolve your tax issues you need to know how much you owe and the breakdown of that debt by tax, penalties and interest.
You also need to know how much you owe so you can make a decision on how you are going to deal with your IRS debt. Should you just enter into a payment plan or would
an offer in compromise serve you better? You can’t make a decision without knowing how much you owe.
The way to do this is by getting a record of account from the IRS. A record of account reads like a bank statement or a bill from your power company. It will show how much you owe, when penalties and interest were assessed against you, and what payments have been made on your behalf.
So how do you get a record of account? There are three main ways:
- Going to your local IRS office in person and requesting this information;
- Calling the IRS and requesting this information;
- Mailing a completed Form 4506-T requesting this information.
You can visit the IRS’ website www.IRS.gov to find the most up-to-date version of this form.
This information will be helpful while planning your offer in compromise so you can make sure you are getting a good deal with your offer in compromise.