what do I do now?

[big mistakes]

ten years ago the bottom dropped out of the business and we made the mistake of living off our tax money...we are now paying an installment agreement with the IRS and have paid all of our taxes correctly the past four years. Last year,1999, our income tripled. That would be good except we didn't realize it while we were in the middle of a very hard project that took most of our time. The year passed before we even realized we had made too much and had not paid enough. (The prior years we did not owe any estimated taxes.) We figured to pay the taxes by April 15, 2000 with the new contract money but the project has had so many delays that we could not take the money out. So we have to come up with over $12,000.00 soon and will have penalties and interest too. We are drowning and dont know what to do. There is no one who could lend us that kind of money and the contract money is coming too slow. Where do we go from here? To jail?

 

[HomeGuru]

<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR>Originally posted by big mistakes:
ten years ago the bottom dropped out of the business and we made the mistake of living off our tax money...we are now paying an installment agreement with the IRS and have paid all of our taxes correctly the past four years. Last year,1999, our income tripled. That would be good except we didn't realize it while we were in the middle of a very hard project that took most of our time. The year passed before we even realized we had made too much and had not paid enough. (The prior years we did not owe any estimated taxes.) We figured to pay the taxes by April 15, 2000 with the new contract money but the project has had so many delays that we could not take the money out. So we have to come up with over $12,000.00 soon and will have penalties and interest too. We are drowning and dont know what to do. There is no one who could lend us that kind of money and the contract money is coming too slow. Where do we go from here? To jail?<HR></BLOCKQUOTE>

No you are not going to jail. The IRS knows that in jail you would not make enough money to pay them back. Hire a tax attorney to do a workout with the IRS ie. revised installment payment plan or offer in compromise.

That is why the IRS calls the form 1040. For every $50 you make , you keep 10 and they keep 40.