JJ wrote:my co-worker at the grocery store I work at has a kid in Afghanistan. He makes whatever minimun wage is sweeping the floor (we have CEO's applying for sacking positions). The IRS has decided he owes 3000. dollars from six years ago (which he say's they told him he doesn't owe). Every day they send him a mountain of paperwork (which he shows me). They say he now owes them 16,000. in penalties, in addition to the 3000. They have set up a payment program; repleat with threats that if he misses a payment, jail. The payment program is 150.00 a month AND 105. PROCESSING FEE every month. What rape. 250.00 a month on minimum wage. (He's my age, 50.) He's also, in my estimation and my other co-workers estimation, pretty close to going postal on a government employee.
Sounds like he needs some legal help. If he can't afford a lawyer, he should make a trip to the library at least. There's no debtors prison. IRS can't jail you for being unable to pay your tax bill. They can only jail you for things like tax evasion (i.e. willfully concealing income or something.) It's VERY rare that IRS prosecutes someone. Much more common is stuff like garnishing wages, or placing liens on property. If your friend doesn't have assets, bankruptcy would be an option. Another option would be to just let them garnish his wages. There's limits to how much they can take out of each paycheck and it might well be less than $250/mo. There's a ten year statute of limitations. You'd have to look up the specifics, but as I recall it starts ticking the day the return is due. After the time limit expires, IRS has to stop trying to collect the tax. Might be worth letting them garnish and waiting for the time limit. If he has a house or other significant assets, then there's not much choice but to suck it up and pay them off.