$21,087 Tax Debt Resolved With Streamlined Installment Agreement
SITUATION:
A client was facing significant issues with the IRS due to a defaulted installment agreement. The client owed $21,087 for multiple tax years and was at risk of impending collection actions. The situation required immediate intervention to prevent further collection activity and to find a manageable solution.
INVESTIGATION PHASE:
Upon receiving the case, our tax team initiated the investigation by assigning a dedicated case manager to assist through the process. The first step was to organize a comprehensive financial profile, which included gathering detailed information about the client’s income, expenses, assets, and liabilities. This process involved collecting various supporting documents such as pay stubs, bank statements, and any other relevant financial records.
With a complete financial profile in hand, we obtained a signed power of attorney from the client, which authorized us to communicate directly with the IRS on their behalf. Using this authorization, we requested the client’s IRS master tax file, which provided a thorough account history, including all transcripts, income details, and outstanding tax liabilities. The review of this file confirmed that the client owed $21,087 for multiple tax years and that the previous installment agreement had defaulted, placing them at risk of aggressive IRS collection actions.
Recognizing the urgency of the situation, we promptly requested a stay of enforcement from the IRS to halt any immediate collection actions. This pause gave us the necessary time to analyze the client’s financial situation and develop a suitable resolution strategy.
Our tax professionals meticulously reviewed all information provided by the IRS, confirming the exact balance owed, including any accrued penalties and interest. We determined that the client’s financial situation, while strained, did not qualify for an Offer in Compromise but was suitable for a Streamlined Installment Agreement (SIA).This type of agreement would allow the client to pay off their debt in manageable monthly installments without extensive financial documentation or negotiation.
We also explored potential penalty abatements. Although the client’s financial situation did not qualify for significant penalty reductions, we ensured that all possible avenues were considered to minimize their financial burden.
To summarize, the investigation phase included:
- Detailed Financial Profile Creation: We worked closely with the client to gather and organize all necessary financial information and supporting documents.
- Power of Attorney and IRS Communication: We obtained the signed power of attorney to directly communicate with the IRS and requested the client’s master tax file for a complete overview of their tax liabilities.
- Stay of Enforcement: We successfully requested a temporary halt on IRS collection actions, allowing us time to develop a suitable resolution plan.
- Thorough Analysis: Our tax team reviewed the IRS-provided information, confirming the total amount owed and evaluating the client’s financial condition for the best possible resolution.
- Resolution Strategy Development: We determined that a Streamlined Installment Agreement (SIA) was the most appropriate solution, ensuring manageable monthly payments of $393.
Throughout the investigation phase, we maintained clear and open communication with the client, explaining each step and ensuring they were informed and comfortable with the proposed strategies. Our goal was to provide a resolution that not only addressed their immediate needs but also offered a sustainable and financially manageable path forward.
COMPLIANCE PHASE:
After reviewing the client’s financial situation and tax records, we determined that a Streamlined Installment Agreement (SIA) would be the most appropriate resolution. The SIA allows the client to make consistent monthly payments without the risk of the IRS revisiting the financial situation annually to potentially increase the payment amount.
RESOLUTION PHASE:
We successfully set up a Streamlined Installment Agreement for the client with monthly payments of $393. This agreement ensures that the client can make affordable payments without the risk of adjustment due to financial reviews by the IRS. Collection activity was halted, and the client can now manage their payments comfortably without worrying about increases or additional IRS actions.
Total Amount Owed: $21,087
Amount After Setup Of SIA: $21,087
Resolution: Streamlined Installment Agreement
Phases Worked: Investigation, Compliance, & Resolution
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DISCLAIMER
This case illustrates the resolution of a client’s tax issues under specific circumstances. Each tax situation is unique, and results may vary. Our team includes former IRS employees, special officers, enrolled agents, tax attorneys, and CPAs who work diligently to find the best resolution based on your individual situation. Our goal is to ensure you pay the lowest legally required amount based on your finances and allowable deductions.