Tax debt of $87,635.16 resolved With A Currently Not Collectible Status ($0 Paid)

SITUATION:

A 74 years old retired teacher contacted us with a tax debt of what she thought was $70K. Unfortunately, she was diagnosed with Parkinsons which had progressed to a point where she was unable to live a normal life and having the tax debt was giving extra stress she didn’t need. Before contacting us she had set up a payment plan with the IRS, but she was not able to afford the monthly payments, so this led to her being levied. She reached out to us to help her.

INVESTIGATION PHASE:

We began our investigation to determine exactly what was happening with her file. We needed a clear picture of her finances to provide a realistic resolution. We assigned this case to our tax team who helped her organize a detailed financial profile where all income, expenses, assets and liabilities were listed. 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 sent the signed Power Of Attorney to the IRS and requested her master file. It was determined that she owed a total of $87,635.16 and not the $70K she initially thought.

Since she stopped making payments towards the payment plan she had set up with the IRS, we moved as quickly as possible to avoid another bank levy.

Next, our tax team gathered the financial supports such as proof of income, expenses and medical bills. Our enrolled agent reviewedall possibilities of penalty abatement, and different resolutions for example: offer in compromise, currently non collectable, partial payment installment agreement, and presented a complete investigation report with her final resolution recommendation. 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.

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 current proof of her financial situation, we collected bank statements, hardship letters, and a copy of her medical bills. 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 says she can now sleep at night and can focus on spending quality time with her loved ones. She is very grateful!

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

Total amount owed: $71,420.46
Resolution: Offer In Compromise
One Time Payment: $5,044.00
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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