Members of the Maryland Association of Certified Public...

Tax answers

March 01, 1996

Members of the Maryland Association of Certified Public Accountants are answering readers' tax questions through April 15.

Q: I recently discovered I owe taxes for 1995. I do not have the money to pay in one lump sum, and wanted to know if I could pay in installments?

A: You should immediately contact the IRS and the Maryland Comptroller's office in writing, explaining your situation. Both are generally willing to work out an installment arrangement. Be prepared. Depending on how much tax is owed and the length of time you need to pay, you may need to provide extensive financial data concerning your income and assets. You may complete Form 9465 to the IRS requesting an installment arrangement. If you do file a Form 9465, be aware that you will be billed a $43 filing fee and you should file as soon as possible since there is a 30-day response period. You should also do your best to pay back taxes in full to avoid penalties for late payment.

Q: Is the sales tax or the charges we have to pay the MVA on new or used cars deductible?

A: Such charges are deductible, through depreciation, only to the extent the vehicles to which they apply are used solely for business purposes. Personal vehicles taxes and fees are not deductible in Maryland.

The above advice is for general purposes only and is not intended as legal, accounting or tax advice. Specific situations may vary.

A joint service from The Sun and the Maryland Association of Certified Public Accountants can help you with your tax queries. Association members, all CPAs, will answer questions from readers until April 15. To ask a tax question, call Sundial, The Sun's telephone information service, at (410) 783-1800. Using a touch-tone phone, enter 6225 after you hear the greeting.

Callers are asked to leave their names and phone numbers, should questions need to be clarified. Selected questions will be answered in the Business section. No questions will be answered by phone.

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