$15,000 In IRS Tax Debt Resolved with A Currently Not Collectible Status ($0 Paid)
SITUATION:
A client from Florida was facing a significant IRS debt of $15,000. The client’s financial situation made it challenging to make regular payments, and there was a risk of aggressive collection actions from the IRS.
INVESTIGATION PHASE:
Upon taking on the Florida client’s case, our tax team promptly assigned a dedicated case manager to guide them through the process. The initial step was to create a detailed financial profile, which involved gathering comprehensive information about the client’s income, expenses, assets, and liabilities. We collected necessary supporting documents such as pay stubs, bank statements, and expense records to ensure a complete understanding of the client’s financial situation.
Once the financial profile was established, we obtained a signed power of attorney from the client, authorizing us to communicate directly with the IRS on their behalf. With this authorization, we requested the client’s IRS master tax file, which provided detailed information on their tax history, income records, and outstanding tax liabilities. The review confirmed that the client owed $15,000 and was facing the possibility of aggressive IRS collection actions.
To prevent immediate enforcement actions, we promptly requested a stay of enforcement from the IRS, which temporarily halted any collection efforts. This pause allowed us to thoroughly analyze the client’s financial condition and determine the most suitable resolution strategy.
Our tax professionals meticulously reviewed all the information provided by the IRS, confirming the exact amount owed and evaluating the client’s financial hardship. Given the client’s limited income and inability to make regular payments, it became clear that they were a strong candidate for Currently Not Collectible (CNC) status. This status would suspend IRS collection activities due to the client’s financial hardship.
During the investigation phase, we ensured that the client was in full compliance with the IRS by verifying that all required tax returns had been filed. This compliance was crucial for qualifying for CNC status. Our tax team also explored any potential for penalty abatements to further alleviate the client’s financial burden, although the primary focus was on achieving CNC status.
In summary, 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 comprehensive overview of their tax liabilities.
Stay of Enforcement: We successfully requested a temporary halt to 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.
Resolution Strategy Development: We determined that Currently Not Collectible (CNC) status was the most appropriate solution, suspending IRS collection activities due to the client’s financial hardship.
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 addressed their immediate needs and offered relief from the financial strain imposed by the IRS debt.
NEGOTIATION PHASE:
Through a series of intense negotiations with the IRS, we advocated for the client’s case to be placed in Currently Not Collectible (CNC) status. This status indicates that the client is unable to make payments due to financial constraints, and the IRS agreed to halt any collection actions.
RESOLUTION PHASE:
We successfully secured a Currently Not Collectible status for the client, meaning they are not required to make any payments toward their $15,000 IRS debt. This resolution provides significant relief, as the client will not face further collection actions or financial strain related to this debt.
Total Amount Owed: $15,000
Amount After Resolution: $0
Resolution: Currently Not Collectible Status
Phases Worked: Negotiation & Resolution
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DISCLAIMER
This example demonstrates the successful resolution of an IRS debt case under specific circumstances. Each case is unique, and results may vary based on individual financial situations. Our team works diligently to provide the best possible outcome tailored to your specific needs and circumstances.