Tax Bill & IRS FAQ

Questions:

• I am faced with a tax bill that I can't pay. Am I completely at the IRS's mercy, or do I have some options?
• I made a mistake on my tax return and am now being billed for the taxes, plus interest and penalties. Do I have to pay it all?
• Can the IRS take my house if I owe back taxes?
• Can the IRS charge me interest if I was incorrectly sent a refund and the IRS now wants it back?
• How legitimate are the seminars and books by "tax experts" claiming you don't have to pay income taxes?

Answer:

Can the IRS charge me interest if I was incorrectly sent a refund and the IRS now wants it back?

It depends. The Internal Revenue Manual states that "taxpayers should not be held liable for interest on ... erroneous refunds if the IRS was clearly at fault ... and the taxpayer is cooperative in repaying." If you caused the refund and can't afford to repay it, however, the IRS can charge interest from the time it requested the repayment.