Get your taxes done using TurboTax

Just trying to deal with 2021. I don't expect this situation in any other years.  I am squared away with IRS in all previous years. Just computed that I have $44K tax bill for 2021.  Otherwise I live off military retirement, which covers living expenses. 2021 was exceptional.  

 

From what I understand about OIC, I provide data on my situation (assets, circumstances), IRS uses that to compute what they could expect from me over 10 years.  They would accept an OIC if it is around that computed amount, and then I think  you have 2 years to pay the proposed amount (and pay 20% up front of the proposed amount) .

 

I don't have home equity, and my only other assets are what remains in my Roth IRA. I have $44K in that IRA, but I think that would result in unreasonable financial burden  (per IRS docs, they consider that) and they perhaps would likely understand that wiping out an IRA to pay a tax bill is a bit extreme, especially since I have VA disability status, and leaves one at high risk of not being able to cope with future emergencies).  

 

Thing is I never made estimated tax payment after I made the Roth IRA distribution.  So I am trying to get to the IRS whatever I can send now.  But hence a dilemma - if I send $5K now (not as part of OIC paperwork), and offer to pay $20K, then by the time I submit the OIC I won't have money left to send as the initial OIC payment, unless the IRS would consider the $5K I send now.  Yeah, gets complicated, and IRS not answering the phones makes things all the worse...

 

Sure would be nice if US Govt extended CARES Act til Dec 2021...