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Old 07-02-2008, 10:55 PM
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Earned Income Tax - Not Sure What To Do

I hope this is the right place for this question.

I'm supposed to get $300 from the Federal Government from Earned Income Tax credit. I'm pretty sure that's the reason I'm supposed to get money from them. Anyway, when I filled my taxes for 2007 I also owed the government about $200. The person who did my taxes, knowing that I have severe financial problems, told me that I didn't have to pay the Feds the $200 and that they will take the money out of the $300 that they owe me.

I paid them $50 in April anyway. I did receive a letter from the Feds saying that I owed them the balance, which I knew. I spoke to my tax accountant again and she said not to worry and that the Feds will be sending the checks out in July.

Yesterday I received another letter from them saying that I owed them the money and if I didn't pay within ten days they would put a lien on something to get the money.

I don't have anything for them to place a lien on and I honestly don't even have the hundred and some odd dollars to pay them. I have less than $100 in my checking account.

It's only July 2 and I am expecting the money from the Feds but don't know if I should contact them now and tell them that I was waiting for them to take the owed money out of the check that I'm supposed to get from them.

I'm a little worried because the last thing I need is IRS problems for owing them about $179.

I don't know what the best thing is to do and I don't need any more problems than I already have which are way too much now.

Any advice? Should I call them, wait for the check knowing that they will take out the money, or just wait until they come to my door and arrest me for tax evasion?

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Old 07-14-2008, 12:39 PM
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The best thing to do is to call the IRS and explain that you do not have the money to pay the tax liability. But, you should also inform the IRS that you are hoping that the IRS will satisfy the tax liability by withholding your stimulus tax refund, and in fact were informed as such by your tax preparer.

I think you should not worry as the IRS is doing exactly that, in that all the stimulus refunds payments to taxpayers are checked to see if the taxpayers owe any back taxes. If they do, the back taxes are satisfied by stimulus payments.

Find a CPA near you!

Ask TaxGuru Please refer to the legal disclaimer.

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