Over the past couple of weeks I have been working to resolve the IRS debt accrued by one of my customers. Due to personal and financial issues they fell behind one year. This made it easier to fall behind in the following years. This is the parallel story that most of my customers share. This resulted in a tax debt exceeding $50,000.
Their income and assets were too great to do an IRS settlement (Offer in Compromise) and would have to do a IRS Payment Arrangement in order to avoid any Wage Garnishment or Bank Levy. Their financial statement showed that they could pay at least $1,400 per month to the IRS, but luckily there is a way to pay a lesser amount per month. This will allow them some flexibility to pay a minimum with an option of paying more voluntarily.
The IRS began a Fresh Start Program in 2011 in order to help those with tax debt. This allows those who owe under $50,000 to pay their total balance off in 72 months as a Streamline Payment as long as it is a direct deposit (when over $25,000). The total balance owed did exceed $50,000 but the Streamline Payment in the Fresh Start Program goes off the the assessed balance and does not include penalties and interest. This made it an option for us to barely squeak by and work out a Streamline Payment of less than $700 rather than the $1,400.
Make sure that you work with an experienced and knowledgable tax professional when working out your back tax debt. The IRS will not lay out options available to you. Working with a professional you trust will ensure that you get the best situation available to you.