Archive for Intent To Levy

IRS Can Levy More Than 15% of Social Security Benefits According to Bowers V. US

December 4, 2012 Back Taxes Owed, Income, Intent To Levy, Intent To Lien, IRS Centralized Insolvency, IRS Collections, IRS Enforcement, IRS Levy, IRS Lien, Social Security, Social Security Tax, Tax Court, Uncertain Tax Position

The distinction of how this is possible distills down to understanding the nuanced difference between a ‘Continuous’ and a ‘One Time’ IRS tax levy.

Under Code Sec. 6331(h) once a tax levy is approved, the effect of the levy on specified payments received by a taxpayer is continuous from the date the levy is first made until the levy is released. A continuous levy attaches to up to 15 percent of any specified payment including social security payments.

However as a one-time levy, the 15 percent cap on continuing levies under Code Sec. 6331(h) does not apply to monthly social security benefits allowing the IRS to take more than 50 percent of the taxpayer’s monthly benefit in Bowers v. U.S., 2012 PTC 133 (C.D. Ill. 5/22/12).

In the Bowers case we learn that according to the court, the IRS has discretion to approve continuous levies under either Code Sec. 6331(a) or (h) however it is not required to attach a continuous levy even where the type of property might be eligible for one.

The court stated in this case that social security payments represented a present, vested right to receive benefits in fixed monthly payments for the taxpayer’s life and the amount of the benefits are based upon a formula that included prior wages.

Because the social security benefits were not contingent on the performance of any additional services the tax levy could attach to the entire stream of Social Security payments as a one-time levy under Code Sec. 6331(a) and (b). Thus, the levy was considered a one-time levy.

As a one-time levy, the 15 percent cap on continuing levies under Code Sec. 6331(h) does not necessarily apply.

I think the lesson learned here is that if you are having your social security levied try to have it levied under IRC 6331(h) as a continuous levy subject to the 15% maximum threshold..

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Summary, Deficiency and Jeopardy IRS Assessments

June 28, 2011 Amended Tax Return, Appeals & Audit Resolution, Back Taxes Owed, Installment Agreement, Intent To Levy, Intent To Lien, IRS Appeal, IRS Audit, IRS Centralized Insolvency, IRS Collections, IRS Enforcement, IRS Examination, IRS Levy, IRS Lien, IRS Mediation, IRS Penalties, IRS Penalty and Interest Abatement

Collection of federal taxes starts with an assessment of tax due. The assessment serves two functions.

  1. It is the government’s mechanism for keeping records and recording a liability.

  2. The assessment, authorizing the government to collect, is equivalent to the final judgment that a general creditor must obtain to collect a debt.

The IRS makes assessments in a variety of ways and times depending on what prompts it. The Service makes summary or automatic assessments of tax when a taxpayer files a return showing a tax liability, or submits payment.I.R.C. §§ 6201(a)(1), 6213(b)(4). The taxpayer consents to the Service assessment of the amount shown on his return through his submission thereof. If there is a balance due after the making of an assessment, the Service will mail a notice to that effect. The Service also makes a summary assessment when it records most penalties, especially those calculated from the information voluntarily supplied on the tax return. I.R.C. § 6665. For example, if a taxpayer files a return two months late reflecting a balance due of $10,000 tax, the Service, without examining the return, can and will automatically assess the $10,000 and a late filing penalty, and send the taxpayer a notice requesting payment. This too will generate a balance due notice.

Deficiency assessments arise only after a lengthy process of administrative and judicial determination of a taxpayer’s correct liability that begins with the Service examining a tax return (or filing one on behalf of a delinquent taxpayer) and ends with a settlement between the parties or a decision of the court. I.R.C. § 6211 et seq. The process is marked by notices called 30-day letters or a 90-day Notice of Deficiency. As deficiencies are not self-determined, as the tax on a return is, the government may not assess, and therefore may not begin to collect, the amount asserted by the government until the matter is finalized.

In rare cases, the Service can also make termination or jeopardy assessments of any tax due if the government believes collection of the tax is in jeopardy (e.g., government believes the taxpayer is planning to flee the country).I.R.C. §§ 6851, 6861. When the government believes a jeopardy situation exists, Congress has given special permission for the Service to discard the normal pre-assessment and pre-collection procedural safeguards. Instead, the government may assess and collect tax in an expedited manner, and the taxpayer can only challenge the determination of the existence of a jeopardy situation (see I.R.C. § 7429) and of the underlying tax liability afterwards. I.R.C.§§ 6851(b), 6861(b).

Termination and jeopardy assessment rarely occur because the facts necessary to override the normal procedural safeguards prior to assessment are not normally present.

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IRS Centralized Insolvency Operation

June 24, 2011 Back Taxes Owed, Bankruptcy, Intent To Levy, Intent To Lien, IRS Appeal, IRS Audit, IRS Centralized Insolvency, IRS Collections, IRS Enforcement, IRS Examination, IRS Levy, IRS Lien, IRS Penalty and Interest Abatement, Non-filed Tax Returns, Offer In Compromise, Paying Taxes, Self Employ, Small Business, Sole Proprietor, Sub-chapter S, Tax Guidance & Preparation, Tax Relief

  • Call 800-913-9358 to reach the Centralized Insolvency Operation. Hours are 7 a.m. to 10 p.m. eastern time. If the IRS is a creditor in a bankruptcy case, and you determine that IRS was not originally listed as a creditor, notification of the filing should be sent to IRS to prevent violations of the automatic stay. Send notification to:

    Internal Revenue Service- Centralized Insolvency Operation – P. O. Box 7346 – Philadelphia, PA 19101-7346

  • IRS notices are sent to the last known address. This address is determined by the most recently filed tax return, Form 8822, Change of Address, or change of address information obtained from the United States Postal Service. As an official National Change of Address licensee of the USPS, the IRS receives weekly updates of change of address information.

  • Bankruptcy does not prohibit issuance of all IRS notices, and not all IRS notices violate the automatic stay. Some notices, for example inquiries concerning unfiled returns, will continue to be sent to the debtor’s last known address.

  • For individual debtors, the last known address should always remain the debtor’s address. Returns should not be filed “in care of” the trustee. Doing so will change the debtor’s address to that of the trustee and all IRS correspondence relating to that taxpayer will be sent to the trustee.

  • In cases not involving an individual debtor, the debtor’s IRS address of record will be changed to the trustee’s address if the trustee:

    • files a debtor’s tax return in care of the trustee at the trustee’s address, or

    • files a change of address for the debtor with the USPS, or

    • files a Form 8822, Change of Address, with the IRS.

    Any of the above will result in all future IRS correspondence being sent to the trustee. Treas. Reg. §301.6212-2 and Rev. Proc. 2010-16, provide guidance on the procedures for making a change of address and explain the requirements for giving the IRS “clear and concise notification” of a change of address.

  • IRS notices concerning taxes incurred by bankruptcy estates of individuals in chapter 7 and 11 cases, which file separate Form 1041 returns, are properly sent to the bankruptcy trustee. Notices will continue to be sent until the liability is satisfied or the statute of limitations for collection expires.

  • Certain penalties may apply to returns filed by the trustee for taxes owed by the bankruptcy estate. The penalties may be waived if the Bankruptcy Court finds there are insufficient funds to pay administrative expenses. Contact the Centralized Insolvency Operation at the phone number below if you believe any of the penalties should be waived.

  • If you have questions regarding a case where IRS is listed as a creditor, contact the Centralized Insolvency Operation. Be prepared to provide the debtor’s bankruptcy case number or taxpayer identification number. The IRS may only disclose the information permitted by I.R.C. section 6103.

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How to Respond to the ’90 Day’ IRS Letter aka Statutory Notice of Deficiency – IRS Publication 3598

June 7, 2011 Amended Tax Return, Appeals & Audit Resolution, Audit Technique Guide, Back Taxes Owed, Enrolled Agent, Intent To Levy, Intent To Lien, IRS Appeal, IRS Audit, IRS Collections, IRS Enforcement, IRS Examination, IRS Levy, IRS Lien, IRS Mediation, IRS Penalties, IRS Penalty and Interest Abatement, Non-filed Tax Returns, Paying Taxes, Statutory Notice of Deficiency, Tax Guidance & Preparation, Tax Relief

The IRS publishes a short but precise set of instructions on Audit Reconsideration.  Check it out at IRS Publication 3598. Audit reconsideration is the first avenue I consider when responding to the dreaded ’90 day letter’ or IRS Notice of Statutory Deficiency. Almost 99.9% of Notices of Statutory Deficiency can be settled with the IRS unless the time clock runs down resulting in a default tax judgment if you do not file a petition in tax court.

IF you find yourself ‘running out of time’ on the 90 day period, filing a tax court petition and paying court fees and representing yourself pro-se or hiring a tax court lawyer are last choice decisions. They are costly and tax court I hate to say it usually favors the government. The best solution is to manage the IRS Examination (aka Audit), IRS Appeals, and/or IRS Collections early and often to obtain the BEST outcome.

The problem with the 90 day letter is that it is an uphill battle to get the proposed assessment amount changed. If gone unchecked the assessment will proceed to IRS Collections and Collections will assume the amount is correct. It is possible to get the matter back to IRS Examination, but the IRS does not have to comply with that request. If the amount in the 90 day letter is not correct, and you have the documentation and tax authority backing your position, IRS Examination, Appeals, and/or Collections will want to settle the case. The trouble is that by the time the average taxpayer does anything about the 90 day letter there may not be enough time left to arrive at a resolution with IRS examination. Subsequently if a tax court petition is not filed timely, the taxpayer’s options become limited and resolution becomes potentially more expensive.

All of my cases are settled in IRS Appeals before the Tax Court Hearing date. I prefer not go to Tax Court. Also you are not going to Tax Court immediately if you petition, you will go to IRS Appeals as a docketed case, and you can most likely settle it there. You should try to work it out with the IRS, but you need to be prepared that if the 88th day comes, that you will need to petition the Tax Court to preserve your rights. I’m not a lawyer but I can tell you that filing the petition in tax court is not as daunting as it sounds. The first thing the court does is send the file to IRS Appeals to be worked out and that is where I come in. The tax court petition kicks a taxpayer’s file into appeals from wherever it is in the IRS system. If you can work it out with IRS before the petition is filed, that saves the fees for filing the petition and the additional correspondence required for dealing with the IRS attorneys.

I found ALL the following works to the taxpayer’s advantage when time winds down if proper documentation and tax authority is held: file a reconsideration along with IRS Form 843 to request a refund or abatement; File an amended return Form 1040X to modify IRS assessments (or a 1040 to modify a return that the IRS may have prepared on the taxpayers behalf); Request an Appeal; or as a last resort if you are quickly approaching a time deadline, file a petition in US Tax Court

I must say though that from my own somewhat biased perspective it is much easier to get the total amount of an entire tax liability (covering multiple tax periods) established in IRS appeals where the IRS Appeals Officer can deal with the entire situation rather than spending copious amounts of time on the phone coordinating between IRS examination or IRS customer services (processing the past due or amended returns) and IRS collections for each specific tax matter and tax period.

Most anyone, be they an EA or CPA or a person with no professional training whatsoever, can assist other tax payers in tax court presuming the taxpayer with the court petition is willing to act on their own behalf. Before considering this route go to tax court and sit in that room and hear a proceeding.  This is a valuable experience to learn how the tax court actually operates. Tax court proceedings are not the same as Federal Court. I’ve found the tax court judges offer more room for parties to argue cases which I consider to be a special talent. The proceeding is usually less formal but timeliness and preparation are demanded and the tax rulings themselves have been fairly predictable.

Filing a Tax Court Petition is ultimately a great tool in buying more time to prepare the necessary documents to prove the assessment should not take place. More than likely you will have 6 months after you file the petition before you even hear from an IRS Appeals Agent.

Keep in mind that as long as you have not signed and waived your dispute rights with a ‘closing agreement’ (IRS Form 906); a ‘compromise agreement’ or an ‘appeals agreement’ (IRS Form 870-AD) with the IRS you do not have to go to tax court.  So before you SIGN ANYTHING be sure to consult with someone you trust.

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How to Get a ‘Fresh Start’ with the IRS

June 1, 2011 Alternative Minimum Tax (AMT), Amended Tax Return, Appeals & Audit Resolution, Back Taxes Owed, Business Expense, Colorado Department of Revenue, Disallowed Expenses, Intent To Levy, Intent To Lien, IRS Appeal, IRS Audit, IRS Collections, IRS Enforcement, IRS Examination, IRS Levy, IRS Lien, IRS Mediation, IRS Penalties, IRS Penalty and Interest Abatement, Non-filed Tax Returns, Paying Taxes, Payroll Tax Problems, Rental Real Estate, Self Employ, Small Business, Tax Problems & Requests, Tax Relief

According to IR-2011-20 published on Feb. 24, 2011, in its latest effort to help struggling taxpayers, the Internal Revenue Service announced a series of new steps to help people get a fresh start with their tax liabilities. The goal is to help individuals and small businesses meet their tax obligations, without adding unnecessary burden to taxpayers. Specifically, the IRS is announcing new policies and programs to help taxpayers pay back taxes and avoid tax liens. The changes include:

  • Significantly increasing the dollar threshold when liens are generally issued, resulting in fewer tax liens.

  • Making it easier for taxpayers to obtain lien withdrawals after paying a tax bill.

  • Withdrawing liens in most cases where a taxpayer enters into a Direct Debit Installment Agreement.

  • Creating easier access to Installment Agreements for more struggling small businesses.

  • Expanding a streamlined Offer in Compromise program to cover more taxpayers.

Tax Lien Thresholds

The IRS will significantly increase the dollar thresholds when liens are generally filed. The new dollar amount is in keeping with inflationary changes since the number was last revised. Currently, liens are automatically filed at certain dollar levels for people with past-due balances.

The IRS plans to review the results and impact of the lien threshold change in about a year.

A federal tax lien gives the IRS a legal claim to a taxpayer’s property for the amount of an unpaid tax debt. Filing a Notice of Federal Tax Lien is necessary to establish priority rights against certain other creditors. Usually the government is not the only creditor to whom the taxpayer owes money.

A lien informs the public that the U.S. government has a claim against all property, and any rights to property, of the taxpayer. This includes property owned at the time the notice of lien is filed and any acquired thereafter. A lien can affect a taxpayer’s credit rating, so it is critical to arrange the payment of taxes as quickly as possible.

Tax Lien Withdrawals

The IRS will also modify procedures that will make it easier for taxpayers to obtain lien withdrawals.

Liens will now be withdrawn once full payment of taxes is made if the taxpayer requests it. The IRS has determined that this approach is in the best interest of the government.

In order to speed the withdrawal process, the IRS will also streamline its internal procedures to allow collection personnel to withdraw the liens.

Direct Debit Installment Agreements and Liens

The IRS is making other fundamental changes to liens in cases where taxpayers enter into a Direct Debit Installment Agreement (DDIA). For taxpayers with unpaid assessments of $25,000 or less, the IRS will now allow lien withdrawals under several scenarios:

  • Lien withdrawals for taxpayers entering into a Direct Debit Installment Agreement.

  • The IRS will withdraw a lien if a taxpayer on a regular Installment Agreement converts to a Direct Debit Installment Agreement.

  • The IRS will also withdraw liens on existing Direct Debit Installment greements upon taxpayer request.

Liens will be withdrawn after a probationary period demonstrating that direct debit payments will be honored.

Installment Agreements and Small Businesses

The IRS will also make streamlined Installment Agreements available to more small businesses. The payment program will raise the dollar limit to allow additional small businesses to participate.

Small businesses with $25,000 or less in unpaid tax can participate. Currently, only small businesses with under $10,000 in liabilities can participate. Small businesses will have 24 months to pay.

The streamlined Installment Agreements will be available for small businesses that file either as an individual or as a business. Small businesses with an unpaid assessment balance greater than $25,000 would qualify for the streamlined Installment Agreement if they pay down the balance to $25,000 or less.

Small businesses will need to enroll in a Direct Debit Installment Agreement to participate.

Offers in Compromise

The IRS is also expanding a new streamlined Offer in Compromise (OIC) program to cover a larger group of struggling taxpayers.

This streamlined OIC is being expanded to allow taxpayers with annual incomes up to $100,000 to participate. In addition, participants must have tax liability of less than $50,000, doubling the current limit of $25,000 or less.

OICs are subject to acceptance based on legal requirements. An offer-in-compromise is an agreement between a taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed. Generally, an offer will not be accepted if the IRS believes that the liability can be paid in full as a lump sum or through a payment agreement. The IRS looks at the taxpayer’s income and assets to make a determination regarding the taxpayer’s ability to pay.

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Tax Refund Withholdings and Offsets

April 12, 2011 Intent To Levy, Intent To Lien, IRS Audit, IRS Collections, IRS Examination

If you owe money because of certain delinquent debts, the IRS or the Department of Treasury’s Financial Management Service (FMS), which issues IRS tax refunds, can offset or reduce your federal tax refund or withhold the entire amount to satisfy the debt.

If you owe federal or state income taxes your refund will be offset to pay those taxes. If you had other debt such as child support or student loan debt that was submitted for offset, FMS will take as much of your refund as is needed to pay off the debt, and send it to the agency authorized to collect the debt. Any portion of your refund remaining after an offset will be refunded to you. You will receive a notice if an offset occurs. The notice will reflect the original refund amount, your offset amount, the agency receiving the payment, and the address and telephone number of the agency. If you filed a joint return and you’re not responsible for the debt, but you are entitled to a portion of the refund, you may request your portion of the refund by filing IRS Form 8379, Injured Spouse Allocation.  These are some helpful points:

  • Attach Form 8379 to your original Form 1040, Form 1040A, or Form 1040EZ or file it by itself after you are notified of an offset.
  • If you file a Form 8379 with your return, write “INJURED SPOUSE” at the top left corner of the Form 1040, 1040A, or 1040EZ. In so doing the IRS will process your allocation request before an offset occurs.
  • If you are filing Form 8379 by itself, it must show both spouses’ social security numbers in the same order as they appeared on your income tax return.
  • You, the “injured” spouse, must sign the form.
  • Do not attach the previously filed Form 1040 to the Form 8379.
  • Send Form 8379 to the Service Center where you filed your original return.
  • The IRS will compute the injured spouse’s share of the joint return for you.
  • Contact the IRS only if your original refund amount shown on the FMS offset notice differs from the refund amount shown on your tax return.
  • Follow the instructions on Form 8379 carefully and be sure to attach the required forms to avoid delays.
  • If a notice is not received contact the Financial Management Service at 800–304–3107, Monday through Friday from 7:30AM to 5 PM (Central Time).
  • For assistance with completing Form 8379, Injured Spouse Allocation, contact me.

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When to File Collection Appeal Request (CAP) IRS form 9423

November 6, 2010 Intent To Levy, Intent To Lien, IRS Appeal, IRS Audit, IRS Collections, IRS Enforcement, IRS Examination, IRS Levy, IRS Lien, IRS Mediation, IRS Penalties, IRS Penalty and Interest Abatement

A Collection Appeal Request (CAP) –  IRS Form 9423 - is filed in response to the IRS enforcing collection against an accrued amount they believe they are owed by you or the denial or termination of an installment agreement. Except in specific cases involving asset seizure, a conference with the collections function manager is required in the attempt to resolve the issue in advance of the CAP being forwarded to a settlement officer for a hearing.  CAPs address the following issues:

  • Federal tax lien,

  • Levy or notice of levy,

  • Seizure,

  • Denial of installment agreement, and

  • Termination of installment agreement.

Time frames for submission following IRS enforced collection are critical. For example, if a taxpayer receives a Notice of Rejection/Denial of proposed installment agreement, a CAP must be filed within thirty days of the date of the notice in order to conduct the managerial conference and CAP hearing free from additional enforced collection action. If the CAP is filed after the 30-day filing window has expired, the managerial conference and CAP hearing will likely still be conducted; however, the IRS will not be precluded from simultaneously moving forward with additional enforced collection action against the period(s) included in the CAP.If no conclusion is reached in the mandatory managerial conference, the CAP is forwarded to a local IRS Appeals office and a settlement officer will be assigned. Per IRM 8.24.1.2:

Oftentimes, the issue raised in a CAP will require additional financial information to make a determination such as proof of financial hardship incurred when determining whether or not to release a wage levy.

Proactively gathering financial information before the CAP is filed will aid in reaching an amicable resolution quickly.  Lately they’ve been trying to settle these things in 5 business days including having a settlement officer confirm the IRS followed all procedural requirements in enforcing collection efforts. After reviewing all relevant information, the settlement officer will issue a determination sustaining/upholding the collection action or releasing/reversing the action.  The settlement officer has the ability and authority to offer a mediated resolution such as an installment agreement with augmented terms or a partial release of a bank account levy.



John R. Dundon, EA – 720-234-1177 – jddundon@comcast.net – http://prep.1040.com/jd/ – DEFEND YOURSELF AGAINST THE IRS – Enrolled with the United States Department of Treasury to Practice before the IRS – Enrolled Agent # 85353. Under contract with the IRS as a Certified Individual Taxpayer Identification Number (ITIN) Acceptance Agent – I am a Federally Authorized Tax Practitioner (USC 31 Section 330 + IRC 7525a.3.A) regulated under US Treasury Cir. 230.

http://prep.1040.com/jd

http://johndundon.taxtutor.com

jddundon@comcast.net
720-234-1177

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IRS Notice – what to do ….

August 25, 2010 Amended Tax Return, Appeals & Audit Resolution, Back Taxes Owed, Intent To Levy, Intent To Lien, IRS Appeal, IRS Audit, IRS Collections, IRS Enforcement, IRS Examination, IRS Levy, IRS Lien, IRS Mediation, IRS Penalties, IRS Penalty and Interest Abatement, Tax Guidance & Preparation, Tax Problems & Requests, Tax Relief

There are number of reasons the IRS sends notices to taxpayers. Each letter and notice offers specific instructions on what you need to do to satisfy the inquiry.

If you receive a correction notice, you should review the correspondence and compare it with the information on your return. If you agree with the correction to your account, usually no reply is necessary unless a payment is due.

If you do not agree with the correction the IRS made, it is important that you respond as requested. Write to explain why you disagree. Include any documents and information you wish the IRS to consider, along with the bottom tear-off portion of the notice. Before mailing the information to the IRS seriously consider consulting with a professional NOT on the IRS payroll.

Remember IRS employeees are trained in protecting the best interests of the federal government. This means maximizing the amount of money they get from you. The IRS employees are indeed for the most part good people but to do their job they MUST advocate on behalf of the federal governement which usually means working in direct opposition to you. Make sure you know what you are doing or consider bringing in the services of a professional, like myself.

Most correspondence can be handled without calling or visiting an IRS office. However, if you have questions, call the telephone number in the upper right-hand corner of the notice. Have a copy of your tax return and the correspondence available when you call, to help us respond to your inquiry. If they piss you off, don’t get frustrated. Simply call me 720-234-1177. I get matters resolved fairly and efficiently.

Remember it’s important that you keep copies of any correspondence with your records.

Publication 594, The IRS Collection Process ( PDF)
Publication 17, Your Federal Income Tax for Individuals ( PDF)

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If you owe the IRS money, here are some tips …

August 9, 2010 Amended Tax Return, Appeals & Audit Resolution, Audit Reconsideration, Back Taxes Owed, Debt, Disallowed Expenses, Estate Tax, Intent To Levy, Intent To Lien, IRS Audit, IRS Collections, IRS Enforcement, IRS Examination, IRS Penalties, IRS Penalty and Interest Abatement, Paying Taxes, Statutory Notice of Deficiency, Tax Guidance & Preparation, Tax Problems & Requests, Tax Relief, Taxable Income

  1. If you get a bill this summer for late taxes, you are expected by the IRS to promptly pay the tax owed including any penalties and interest. First you should consider appealing the determination based on merit and evidence. For more information on appeals feel welcome to contact me directly at 720-234-1177 or at jddundon@comcast.net

  2. If you are unable to pay the amount due and have no basis for appeal, it is often in your best interest to get a loan to pay the bill in full rather than to make installment payments to the IRS.

  3. You can also pay the bill with your credit card. The interest rate on a credit card or bank loan may be lower than the combination of interest and penalties imposed by the Internal Revenue Code. To pay by credit card contact one of the following processing companies: Official Payments Corporation at 888-UPAY-TAX (also www.officialpayments.com/fed) or Link2Gov at 888-PAY-1040 (also www.pay1040.com) or RBS WorldPay, Inc at 888-9PAY-TAX (also www.payUSAtax.com).

  4. You can pay the balance owed by electronic funds transfer, check, money order, cashier’s check or cash. To pay using electronic funds transfer you can take advantage of the Electronic Federal Tax Payment System by calling 800-555-4477 or online at www.eftps.gov.

  5. An installment agreement may be requested if you cannot pay the liability in full. This is an agreement between you and the IRS to pay the amount due in monthly installment payments. You must first file all returns that are required and be current with estimated tax payments.

  6. If you owe $25,000 or less in combined tax, penalties and interest, you can request an installment agreement using the Online Payment Agreement application at IRS.gov.

    You can also complete and mail an IRS Form 9465, Installment Agreement Request, along with your bill in the envelope that you have received from the IRS. The IRS will inform you usually within 30 days whether your request is approved, denied, or if additional information is needed. If the amount you owe is $25,000 or less, provide the highest monthly amount you can pay with your request.

  7. You may still qualify for an installment agreement if you owe more than $25,000, but a Form 433F, Collection Information Statement, is required to be completed before an installment agreement can be considered. If your balance is over $25,000, consider your financial situation and propose the highest amount possible, as that is how the IRS will arrive at your payment amount based upon your financial information.

  8. If an agreement is approved, a one-time user fee will be charged. The user fee for a new agreement is $105 or $52 for agreements where payments are deducted directly from your bank account. For eligible individuals with incomes at or below certain levels, a reduced fee of $43 will be charged.

  9. Taxpayers who have a balance due, may want to consider changing their W-4, Employee’s Withholding Allowance Certificate, with their employer. There is a withholding calculator available on IRS.gov to help taxpayers determine the amount that should be withheld.

  10. Helpful Links:

    Publication 594, The IRS Collection Process ( PDF)

    Publication 966, Electronic Choices to Pay All Your Federal Taxes ( PDF)

    Form 9465, Installment Agreement ( PDF)

John R. Dundon, EA – 720-234-1177 – www.1040.com/jd – jddundon@comcast.net – Enrolled with the United States Department of Treasury to Practice before the IRS – Enrolled Agent # 85353. Under contract with the IRS as a Certified Individual Taxpayer Identification Number (ITIN) Acceptance Agent – I am a Federally Authorized Tax Practitioner (USC 31 Section 330 + IRC 7525a.3.A) regulated under US Treasury Cir. 230.

http://prep.1040.com/jd

http://johndundon.taxtutor.com

jddundon@comcast.net
720-234-1177

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