Owe the IRS Up to $250K of assessed taxes? The now permanent Non-Streamlined Installment Agreement May Be For You!
Earlier this year, the IRS made permanent a pilot payment plan initiated during COVID that may make it easier for taxpayers owing the IRS up to $250K.
Before we discuss this program, let’s take a look at what taxpayer’s faced Pre-COVID. Prior to COVID, taxpayer’s owing less than $50k of assessed taxes could enter into a Streamlined payment plan. This is still the case today. With a streamlined installment agreement, as long as the taxpayer could pay their tax debt over 72 months or less, they could get into a payment plan with no Collection Information Statement and no Federal Tax Lien with a Direct Debit Installment Agreement. As with other payments plans, they would not be levied.
If the taxpayer owed over $50K, they would enter into a Non-Streamlined Payment plan. This would require the taxpayer provide a Collection Information Statement. Why is that important? First, the taxpayer is required to disclose all of their assets. The IRS would often push the taxpayers to liquidate these assets to pay down their debt. In addition, taxpayers would provide information about their inflows and outflows of cash. When looking at the taxpayer’s ability to pay the IRS, the IRS wanted taxpayers to be limited to the IRS’s allowable expenses vs. actual expenses. While it might be possible to negotiate a more reasonable payment plan, it could be a battle.
During COVID, the IRS instituted a Pilot program where when the taxpayer owed up to $250K of assessed taxes and if they could pay the IRS over the remaining collection statute (the time the IRS has to collect a tax debt), they could get into a payment plan over that period of time with no Collection Information statement required. There were some major advantages to this program. First, the IRS would not push back for higher monthly payments with taxpayers who had actual monthly expenses over those allowed by the IRS. In addition, the IRS would not be looking at the taxpayers assets or requesting that taxpayers liquidate those assets.
There are some limitations to consider. First, it must be personal IRS tax debt, not business debt. Second, the taxpayer’s case must be with the IRS campus or ACS (this is when you are calling the 1-800 number on a notice) vs. being assigned a Revenue Officer to handle your case. Finally, the IRS will file a Federal Tax Lien (except in extenuating circumstances).
What does this mean to you? If you currently, owe the IRS between $50k and $250k of assessed tax debt and have not yet been assigned a Revenue Officer, now is the time to work with the IRS or find a tax problem resolution specialist to help you do so, before you are assigned to a Revenue Officer. Once you are assigned to a Revenue Officer, this option is no longer available and you will be in a situation where your tax problem will be much more difficult to resolve.
Do you want to learn more. Watch our video at https://youtu.be/HMgkORNNPeU
If you find you need professional help, feel free to contact us by calling (954) 715-7285 or you can request an appointment directly on my personal calendar at https://jablonskyandassociates.com/contact/
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