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The tax liability can be “argued” or more appropriately collected upon as long as the statute of limitations on collection (10 years for the IRS) is still open. If the amount of the installment payment is less than necessary to full-pay the liability over the collection statute (known as claiming "hardship"), the IRS will most [...]
There are no international standards. The IRS IRM states “…standards are not available for international taxpayers or the U.S. Territories, except for housing and utilities in Puerto Rico. In the absence of standardized figures for foreign countries, a fair and consistent approach should be applied to what is allowed as living expenses for international taxpayers.” [...]
In terms of cancellation of debt (“COD”) income the answer is no. But if the terms of an offer in compromise are not fully met (including staying in compliance for a 5-year period subsequent to the offer) the balance of the compromised liability will be reinstated.
Typically our fees are based upon our standard hourly rates. Keep in mind that it may be difficult to extract information from tax resolution clients so charging on a fixed fee basis may be risky. Streamlined installment agreements typically begin at around $1,800 and offers may be over $10,000 depending on their complexity.
The answer to this question is both. The IRS will allow an installment payment amount based upon the taxpayer’s current ability to pay. If the taxpayers financial picture indicate he or she will have the opportunity to earn more going forward, the IRS will revisit the installment agreement payment amount in the future. If the [...]
Yes. Both Social Security and Medicare withholding are allowed.
For purposes of an installment agreement, the IRS will often allow higher than their standards. For an Offer in Compromise there are situations where the standards may be exceeded. They typically will allow higher than the out-of-pocket medical expense allowance if the higher amount can be substantiated. Be prepared to make the argument that there [...]
Yes. A husband and wife are currently in an installment agreement. The husband lost his job and the wife was told she has liver cancer. They filed bankruptcy in 2012. Is there a chance to avoid paying the back taxes they owe? The amount owed is currently $24,000 stemming from liabilities from 2010 and before. [...]
This is not correct. The outcome of the case found that if a hold on collection is placed while an installment agreement request is pending, that time will be added to the 10-year statute. A few articles were written stating that an installment agreement tolls the statute but they were misspoken.
To be clear, the forms referenced in this question are submitted as part of a request for an installment agreement and not officially “filed”. Typically you complete an IRS Form 433-A when your client’s case has been assigned to a Revenue Officer (“RO”). In most of these cases you will negotiate directly with the RO [...]
The taxpayer is a shareholder in the corporation they will likely need to provide business information via IRS Form 433-B. In said form, the taxpayer will be required to list bank account information.
Yes. CNC status may be obtained by a business and/or individual with liability stemming from payroll taxes.
If your client owes $2,700 chances are she is assigned to automated collections. Unless she is a “repeat offender” the IRS should have no issue entering her into a streamlined installment agreement. I would hang up the phone and call back to speak with someone else. That being said it will take some time to [...]
You should contact the IRS (either Automated Collections or the Revenue Officer assigned to your client’s case depending on the circumstances) and submit a revised 433A or 433F. Be sure to explain the change in circumstances justifying the submission of the revised form or explain how and why the form was completed incorrectly on the [...]
An installment agreement does not toll the collection statute.
The IRS typically does not include the value of assets when determining an installment agreement payment amount. However, if the taxpayer has substantial assets the IRS may require they be liquidated to pay down the liability which if not done may affect whether a requested installment payment amount is accepted.
No. An installment agreement can encompass several years but if new years or newly discovered liabilities become evident, a new single installment agreement covering all items must be created.
You should call the IRS practitioner Priority Line (“PPL”) at (866) 860-4259. Be sure to have an Installment Agreement Request (IRS form 9465) completed before you call. This will increase the chance of completing the request quickly.
If a client is deemed to be noncollectable (CNC status) it will usually be revisited within 2 years.
The answer to this question depends on the circumstances. There are options allowing a taxpayer to exclude the cancellation of debt (“COD”) income including proof that the taxpayer was insolvent at the time the debt was cancelled but it needs to be looked at on a case-by-case basis. If the COD income cannot be excluded, [...]
Typically you do not. If you think the statute has run or is close to running, you should obtain the taxpayer’s transcripts to verify that collection activity should cease. If the IRS continues to collect, you should contact them via the IRS Practitioner Priority Line (“PPL”) at (866) 860-4259 and discuss the issue. There may [...]
You would use the appraised value less mortgage/s owed for installment agreements and 80% of appraised value less mortgage/s owed for offers in compromise. You can most often use an online website such as Zillow to find the appraised value.
This is an interesting question and as is often the case, there is more than one answer. If the spouses reside in the same residence you typically will include their income, expense, asset and liability information together on one form. If they reside at different locations you should weigh the benefits and downsides to claiming [...]
