$397,610 IRS Tax Debt Placed In Currently Not Collectible Status

SITUATION:

An elderly individual, facing severe illness, approached us with an overwhelming IRS tax debt of $397,610. They were under aggressive collection actions, with the IRS threatening to levy their bank accounts and other assets. Due to limited income and deteriorating health, they had no feasible way to repay the debt.

INVESTIGATION PHASE:

We began the investigation by welcoming the client to our program and reassuring them that our team of professionals would handle the case with the utmost care and dedication. We immediately created an online account to meticulously track their finances, ensuring transparency and organization throughout the process.

Our team worked closely with the client to complete a comprehensive financial profile, detailing all income, expenses, assets, and liabilities. After gathering all the necessary documentation, the case was assigned to one of our expert enrolled agents. We then submitted a signed power of attorney to the IRS, allowing us to communicate directly on the client’s behalf.

Our enrolled agent obtained IRS transcripts and conducted a thorough review of the balances for each year, including all penalties and interest accrued. It was determined that the client owed a total of $397,610. We also confirmed that they were in full compliance with the IRS, with all required tax returns filed.

Given the severity of the client’s health and financial situation, the IRS had begun aggressive collection actions. To provide immediate relief, we requested a stay of enforcement, which temporarily halted any collection actions against the client. This stay was approved for 30 days, giving us crucial time to develop a long-term solution.

Our enrolled agent conducted an in-depth review of the client’s financial statement, which revealed that they had no disposable income after accounting for all necessary living expenses, including medical costs. Given these circumstances, our tax team determined that the client was an ideal candidate for Currently Not Collectible (CNC) status. CNC status is granted to taxpayers who are unable to pay their tax debts due to financial hardship, suspending all IRS collection activities as long as the taxpayer’s financial situation remains unchanged.

We prepared and submitted a detailed financial statement, Form 433-A, to the IRS, illustrating the client’s financial hardship and inability to pay. This form included:

• Income and Expense Analysis: A breakdown of minimal income and essential living expenses, which far exceeded earnings.

• Asset Documentation: A comprehensive list of assets, demonstrating no significant resources to satisfy the tax debt.

• Medical Records: Documentation of severe illness and related expenses, further substantiating the claim of financial hardship.

By securing CNC status, the client would be relieved from making monthly payments, and the IRS would cease all collection activities as long as the financial situation remained the same. The client agreed to proceed with this plan, providing much-needed peace of mind and the ability to focus on health without the constant worry of IRS enforcement actions.

Throughout the investigation phase, we maintained clear and consistent communication with the client, ensuring they were fully informed and involved in every step of the process. Our diligent efforts aimed to secure the best possible outcome, providing relief from the overwhelming tax debt.

COMPLIANCE PHASE:

In the compliance phase, we collected comprehensive financial information from the client, including income, expenses, assets, and liabilities. Our goal was to demonstrate to the IRS that they had no ability to pay the tax debt without enduring significant hardship. We compiled all necessary forms and supporting documentation to accurately reflect the financial condition.

RESOLUTION PHASE:

We submitted the request for CNC status to the IRS, detailing the client’s medical condition, limited income, and overall inability to pay the debt. Throughout this period, we maintained constant communication with the IRS to provide any additional information they required and to advocate for the client’s situation.

After a thorough review, the IRS accepted our request and placed the account in Currently Not Collectible status. This decision halted all collection activities, including levies and garnishments, providing immediate relief and peace of mind.

Total Amount Owed: $397,610

Resolution: Currently Not Collectible (CNC) Status

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.