When you can't pay your taxes, the IRS can be scary. But you can actually take advantage of IRS payment plans that help those unable to pay all their taxes at once.
In the following video, Dan Caplinger, The Motley Fool's director of investment planning, looks at IRS payment plans and how they work. Dan notes that for up to $50,000 in tax debt, you can file an application online to get a payment plan, while those with debt above that level can still mail in forms with the necessary documentation. Dan points out that IRS payment plans aren't a perfect solution, as you'll still incur interest and penalties, as well as a fee of $43 to $120 to process the plan. But by stopping collection activity, an IRS payment plan can be the best option to avoid more draconian measures such as wage garnishment and bank-account attachment.
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