THE WATCHFUL CONSUMER - OUR ECONOMY TODAY

THE WATCHFUL CONSUMER

The economic saga continues. This is clearly discernible in the continued loss of jobs, increasing number of foreclosures as well as retrenchment in the arena of employment. The EDD has been severely overwhelmed with processing unemployment checks, its number of claimants increasing on a daily basis. The bankruptcy courts have been inundated with petition filings, a great number of such were Chapter 7 petitions or what is know as the straight or consumer bankruptcy. Last month alone, it was estimated that 598,000 individuals lost their jobs. Foreclosures are still not a thing of the past and unfortunately a great number of homes are still lost as a result of unemployment.

To date, we have seen a number of vast economic plans, created by the government in an effort to provide a solution to the crisis that has greatly affected most Americans. The Senate’s approval of an eight-hundred & thirty-eight billion dollar economic stimulus plan, by a 61-37 vote is a clear manifestation of its goal to address the fiscal dilemma of the country. The Senate hopes to reconcile the major differences between the bills passed by the House and the Senate. Focus is on the State’s cut of forty billion dollars from the seventy-nine billion dollar state fiscal stabilization fund proposed by the House of Representatives. The Senate’s version of the bill aims to protect the middle class from having to pay the “alternative or millionaires” tax that was originally conceptualized way back in 1969. The aim of such tax is to effect a change in the different deductions, personal exemptions, state and federal tax that can be availed of for deduction purposes.

The Senate has likewise approved the $15,000.00 tax credit to first time home buyers in an effort to stimulate the real estate market. After all, the American dream centers on the realization of owning a piece of real property that one can call home. True, the market values of most homes may have gone down significantly but it is inevitable that its value will again increase in due time.

Another aim of the bill is to subsidize private health coverage for those that are unemployed and to allow access to Medicaid coverage for those who cannot afford to maintain health insurance.

Yes, the consumer is being watchful of the economy, his own individual expenditures, the value of the U.S. currency, as well as the plans of the government to alleviate the hurting economy beset of any immediate viable solution. The State’s economic machinery has started to turn towards recovery. It is not yet in full force but the road to recovery is clearly on its way.

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IRS Installment Agreements

Setting up a monthly payment plan may be your best solution to resolving your tax problems. The IRS is now required to set up an installment agreement for taxpayers who own less than $25,000. A new streamline plan allows for the tax to be paid over 60 months.

Whether you call it an installment agreement, payment agreement, payment option or a payment plan, the idea is the same — you make payments on the tax you owe. That sounds like a good deal, but if you are able, you can save money by paying the full amount you owe as quickly as possible to minimize the interest and penalties you’ll be charged. For those who cannot resolve their tax debt immediately, however, an installment agreement can be a reasonable payment option. Installment agreements allow for the full payment of the tax debt in smaller, more manageable amounts.

Frequently Asked Questions about Installment Agreements/Payment Plans

How to Set Up an Installment Agreement

Taxpayers wishing to pay off a tax debt through an installment agreement, and owe:

• $25,000 or less, you have a streamline option available to you. Without filing any financial statements, the IRS is required to set up a payment plan that combines tax, penalties, and interest. Once a Power of Attorney has been filed, we can help your set up an installment agreement that may be more beneficial to your situation. Call us at (510) 791-5018
  

• More than $25,000 in combined tax, penalties, and interest may still qualify for an installment agreement, but a Collection Information Statement, Form 433F, may need to be completed.

Once a request has been filed, you will receive a written notification telling you whether your terms for an installment agreement have been accepted or if they need to be modified.

Are there fees to set up an installment agreement?

The IRS charges a user fee to set up your installment agreement. The user fee for new installment agreements entered into after January 1, 2007 is $105 and $52 for agreements where payments are deducted directly from your bank account.There is also a user fee of $45 effective January 1, 2007 regardless of income level for reinstating defaulted agreements or restructuring existing agreements. If you already have an approved installment agreement from a previous tax debt and your financial situation has changed, you may be able to modify or restructure your installment agreement to include additional amounts owed into one agreement.

What Happens If I Miss an Installment Payment?

Throughout the term of an installment agreement, your payments must be made on time. If your payments cannot be made due to a change in your financial condition, you should contact the IRS immediately. Failure to make timely payments could default your agreement. A default of your installment agreement may cause the filing of a Notice of Federal Tax Lien and/or an IRS levy action. Either can have a negative effect on your credit standing and cause financial difficulties. Enforced Collection Actions Generally, IRS enforced collection actions (i.e., levy against personal or real property) are not made while an installment agreement request is being considered, or: While an agreement is in effect, For 30 days after a request for an agreement has been rejected, and For any period while a timely appeal of the rejection or termination is being evaluated by the IRS.