DEAR BRUCE: I am hoping you can help me with some of your great knowledge. I am having problems dealing with the IRS. My interest is much higher on my bill than the bill itself. How can I go about getting the IRS to lower or drop the interest fees? — Lee, via email
DEAR LEE: I wish you had been a little more explicit as to what the reason is for the bill. Are there any penalties as well as interest and principal? Have you had a meeting with the IRS yet?
I know you don't want to pay these fees, but are you able to reasonably? If you are, you are going to have a tough time persuading the IRS to lower them. On the other side of that, if you are really being driven right up the wall and you can demonstrate that, oftentimes the IRS is open to negotiation.
You didn't mention the amount of money involved. If it's a substantial amount, over $10,000, there are companies that will negotiate for you. Just remember, don't pay any money up front.
DEAR BRUCE: What is the best way to invest money for children under 10 years old? I would like to start saving for my grandchildren now so that when they turn 18 years old, they will be able to have some extra spending money for college or a car. — D.S., via email
DEAR D.S.: There are a few ways you can invest. If it's for college, a 529 plan is an excellent way, but the money will have to be used for college or the taxes will have to be paid when the money is withdrawn.
As to a car, I think your heart may be in the right place, but your mind is wandering a little bit. The last thing an 18-year-old ought to be given is money for a car, although many people will disagree.
I would put the money into a separate account in your name. When the time comes, you can turn the money over to your grandchildren for them to spend however they chose with your approbation.
You can also purchase U.S. Savings Bonds. It's not a wonderful investment, but when purchased properly, they can be used for education tax-free.