$21,000 Tax Debt Resolved With Streamlined Installment Agreement And Penalty Abatement

SITUATION:

A taxpayer approached us with a manageable IRS tax debt of $21,000. They were proactive about resolving their debt and sought an affordable monthly payment plan. There was no significant hardship in this case; the taxpayer simply wanted to find a reasonable solution to pay off the debt without incurring additional penalties or financial strain.

INVESTIGATION PHASE:

Upon taking the case, we initiated the process by welcoming the taxpayer to our program and assuring them that our experienced team would find the most effective solution for their tax debt. We immediately gathered all relevant financial documents, including income, expenses, assets, and liabilities, to gain a comprehensive understanding of their financial situation.

Our first step was to obtain a signed power of attorney, allowing us to communicate directly with the IRS on their behalf. With this authorization, we accessed the taxpayer’s IRS master file to confirm the total amount owed and review their tax account history.

Our team discovered that the debt was primarily due to underpayment in previous tax years, with no significant errors or discrepancies in the tax filings. Given the taxpayer’s proactive approach and willingness to resolve the debt, we aimed to secure a payment plan that would be both affordable and sustainable.

We determined that a Streamlined Installment Agreement would be the best fit, given the manageable debt amount and stable financial situation. This type of agreement allows taxpayers to pay off their debt in manageable monthly installments without the need for extensive financial documentation or negotiation.

Additionally, we explored the possibility of penalty abatement to reduce the overall amount owed. We reviewed the tax account and identified penalties that could potentially be waived. We prepared a detailed request for penalty abatement, citing the taxpayer’s proactive approach and consistent payment history as grounds for relief.

To summarize, our actions included:

• Income and Expense Analysis: We carefully reviewed the financial documents to ensure the proposed monthly payment would be affordable without causing financial strain.
• Penalty Abatement Request: We prepared a comprehensive request to the IRS for the abatement of penalties, highlighting compliance and efforts to resolve the tax debt.
• Streamlined Installment Agreement Application: We submitted the necessary forms to establish a streamlined payment plan, ensuring minimal paperwork and a swift resolution process.

Throughout the investigation phase, we maintained clear and consistent communication with the taxpayer, keeping them informed of each step and providing guidance on any additional information needed. Our goal was to secure a resolution that would allow them to pay off the debt in a manner that was both feasible and free from additional penalties, ultimately providing peace of mind and financial stability.

COMPLIANCE PHASE:

In the compliance phase, we evaluated the taxpayer’s income, expenses, and overall financial situation. Given their steady income and willingness to pay, we determined that a Streamlined Installment Agreement (SIA) would be the most suitable option. This agreement would allow the taxpayer to pay off their debt in manageable monthly installments without the need for extensive financial documentation.

RESOLUTION PHASE:

We submitted the request for a Streamlined Installment Agreement to the IRS, proposing monthly payments of $407. This plan was designed to fit within the taxpayer’s budget while ensuring timely repayment of their tax debt. Additionally, we identified eligibility for penalty abatement, which could reduce their overall liability.

After reviewing our submission, the IRS approved the Streamlined Installment Agreement, allowing monthly payments of $407. Furthermore, we successfully negotiated a penalty abatement that saved $804, reducing the total debt and making the repayment process more manageable.

Total Amount Owed: $21,000

Resolution: Streamlined Installment Agreement & Penalty Abatement

Monthly Payment: $407Penalty Abatement Savings: $804

Phases Worked: Investigation, Compliance & Resolution

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DISCLAIMER:

This example is an actual example of a client who enrolled in the tax program. Every case is unique and this is not an extension that you will receive the same resolution as they will. Your situation is unique, as are all tax cases. The team has extensive experience, has former IRS employees, special officers, enrolled agents, tax attorneys, and CPAs. Our tax team will work diligently with a flat fee to solve the tax issue you have for the best possible resolution for you. That means doing all possible to ensure you pay the lowest amount of taxes legally required based on your situation, allowable deductions, finances, and other factors.