Defaulted on your IRS installment agreement? Where do you turn now?

You promised the IRS a monthly payment that your budget could no longer bear.  Or you tried so hard to repay your back taxes that you fall behind on this year’s return.  Your intentions are good, but this has caused your IRS installment agreement to default.  Where do you turn next?
First, it is important to know that the IRS must send you a notice of [...]

IRS installment agreement vs. Chapter 13 bankruptcy: Which repayment plan saves you the most?

Trying to repay the IRS in an installment agreement can be difficult.  The interest and penalties the IRS charges doubles the original amount of tax you owe every five years.
Your installment agreement may keep the IRS at bay, but your tax liability does not get paid off.
The tax code and the IRS offers no real way [...]

IRS collections in troubled times

Everyday, I see how the IRS is responding to people hurt by the economy. The Journal of Tax Practice and Procedure asked me to write an article about it  - ”IRS Collections in Troubled Times.”
Current IRS enforcement is centered on recovering government money that was spent to stabilize the economy.  As a result, the IRS is [...]

I owe back taxes to the IRS. Now what? Part II of II

In addition to (1) offers in compromise, (2) bankruptcy and (3) uncollectible (See Part I, above), here are three more solutions to owing back taxes to the IRS:
4.      Statute of limitations on collection.  The IRS has 10 years to collect unpaid taxes – starting from when the IRS puts the tax liability on [...]

Your budget vs. IRS expense allowances – How do you compare?

In determining whether you can repay a delinquent tax liability, the IRS uses its own expense allowances to arrive at your cash flow.  Just because you have the expense does not mean the IRS will allow it.  
In most cases, your housing/utilities and auto operating expenses will exceed IRS guidelines.  Credit card payments are rarely [...]

Proposed relief for IRS interest and penalties.

In these difficult economic times, repaying the IRS is becoming harder than ever.  Installment agreements may be entered into in good faith, but while payments are being made, interest and penalties continue to run.  Every five years, interest and penalties double the original tax.  Most attempts to repay the IRS result in the amount owed increasing, not decreasing, [...]

Offer in compromise vs. bankruptcy – Which settlement amount will be the lowest?

With new clients, I spend time discussing the options for obtaining a fresh start from IRS problems. The consultation most always involves making the client aware of the pros and cons of resolution by compromise, and by bankruptcy.  
In that spirit, here then is the first of a continuing series on the use of an offer [...]

When is the IRS prohibited from taking collection action? Part I.

The list of when the IRS cannot take property is fairly extensive, so I will do this in parts to break it down simply. Here is Part I of when the IRS is prohibited from taking collection action:

When there is insufficient equity in the property.  There must be sufficient net proceeds from the sale to [...]

5 things to always do when talking to the IRS.

1.     Be courteous and respectful.  You will get nowhere with an angry or condescending attitude, and will just give the IRS reason to come down harder on you.  When your head is in the mouth of the bear, say nice bear.
2.     Abide by deadlines, or call for more time if one can’t be met.  Don’t [...]

Agreements to repay IRS debts under $25,000 can be simple and straightforward.

I often have new clients come in who owe the IRS under $25,000 and have the ability to repay the debt with monthly installment agreements.  If we determine they can repay the debt within 60 months, we secure from the IRS a repayment that is called a “streamlined installment agreement.”  The Internal Revenue Manual makes these [...]

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