Tax debt of $28,461 resolved with a Currently Not Collectible Status ($0 Paid)

SITUATION:

A taxpayer contacted us to seek help with her IRS tax debt of approximately $32K. Unfortunately, her mother was very ill and she had to quit her job to become her mothers caregiver. The tax debt and her mother’s illness was causing a lot of stress and she needed help to determine the best possible solution to resolve the debt for the lowest legal amount based on her unique circumstances. Prior to her mother getting sick and quitting her job, she agreed to a payment plan with the IRS to pay the balance in full, but she could no longer afford it and she knew that her defaulting on it could result in liens or levies being filed against her.

INVESTIGATION PHASE:

To begin the investigation process we assigned a case manager who opened an online account and helped her organize a detailed financial profile where all income, expenses, assets and liabilities were identified. A special aspect of the program is where we help clients properly organize their financial profile because we’ve found that if done quickly or with mistakes, everything going forward presents the wrong solutions or ones that are ultimately rejected by the IRS or taxing authorities.
As part of the process, our tax professional requested her master file and organized how much she owed, for what years, penalties, interest, expiration dates of collection and more. It was determined that she owed a total of $28,461 for years 2014-2016, 2018 and 2019.

Since she stopped making payments towards the payment plan she had set up with the IRS, we requested a stay of enforcement which is a temporary hold for collections to protect her from a levy or garnishment being filed while we worked on her case.

After our tax professional reviewed all her information, possibilities of penalty abatement, and different resolutions, an organized investigation report presenting all the options as well as recommended solutions was presented. This is very important because we want clients to know the pros and cons of the various options so that they are part of the solution. Each resolution has different pros and cons and is appropriate based on a variety of factors including a client’s future financial outlook, age of debt, and more. We also include what the client needs to do to stay in compliance with the resolution. Some companies skip this and just recommend one resolution, but this ultimately can backfire for clients.

We presented a complete report with all the findings and it was determined that the best option was to set up a currently not collectible (CNC) status. While the account is in CNC status, the IRS will not engage in further collection activity as long as her financial situation remains the same until the debt expires. With this option she doesn’t have to make monthly payments to the IRS on the outstanding tax debt, which is ideal for her situation.

RESOLUTION PHASE:

During this phase we gathered proof of her financial situation, we collected bank statements, hardship letters, a copy of her bills, her mother’s medical history and all other important supporting documents. We then contacted the IRS and presented her case. The currently not collectible status was approved by management within 14 days of our submission request. With this resolution option the IRS will not proceed with further collection activity as long as her financial situation doesn’t change and she remains 100% in compliance with the IRS. After the statute of limitations expires, the IRS is no longer allowed to collect on the debt. That means that potentially the client could be paying back $0 on their entire tax debt as long as their financial situation continues the same. She is very grateful and relieved to not have to make further payments and can focus on caring for her mother.

CNC was applied for and accepted with the IRS as follows:

Total amount owed: $28,461
Resolution: Currently Non Collectible
Phases worked: Investigation and 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.

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