$21,000 Tax Debt Resolved With Streamlined Installment Agreement And Penalty Abatement

SITUATION:

Stephen Hodke came to us with a manageable IRS tax debt of $21,000. He was proactive about resolving his debt and sought an affordable monthly payment plan. There was no significant hardship in Stephen’s case; he simply wanted to find a reasonable solution to pay off his debt without incurring additional penalties or financial strain.

INVESTIGATION PHASE:

Upon taking Stephen’s case, we initiated the process by welcoming him to our program and assuring him that our experienced team would find the most effective solution for his tax debt. We immediately gathered all relevant financial documents, including his income, expenses, assets, and liabilities, to gain a comprehensive understanding of his financial situation.

Our first step was to obtain a signed power of attorney from Stephen, allowing us to communicate directly with the IRS on his behalf. With this authorization, we accessed Stephen’s IRS master file to confirm the total amount owed and to review his tax account history.

Our team discovered that Stephen’s debt was primarily due to underpayment in previous tax years, and there were no significant errors or discrepancies in his tax filings. Given his proactive approach and willingness to resolve the debt, we aimed to secure a payment plan that would be both affordable and sustainable for him.

We decided that a Streamlined Installment Agreement would be the best fit for Stephen, given his manageable debt amount and stable financial situation. This type of agreement allows taxpayers to pay off their debt in manageable monthly installments without the need for extensive financial documentation or negotiation.

Additionally, we explored the possibility of penalty abatement to reduce the overall amount owed. We reviewed Stephen’s tax account and identified penalties that could potentially be waived. We prepared a detailed request for penalty abatement, citing his proactive approach and consistent payment history as grounds for relief.

To summarize, our actions included:

Income and Expense Analysis: We carefully reviewed Stephen’s financial documents to ensure the proposed monthly payment would be affordable without causing financial strain.

Penalty Abatement Request: We prepared a comprehensive request to the IRS for the abatement of penalties, highlighting Stephen’s compliance and efforts to resolve his tax debt.

Streamlined Installment Agreement Application: We submitted the necessary forms to establish a streamlined payment plan, ensuring minimal paperwork and a swift resolution process.

Throughout the investigation phase, we maintained clear and consistent communication with Stephen, keeping him informed of each step and providing guidance on any additional information needed. Our goal was to secure a resolution that would allow Stephen to pay off his debt in a manner that was both feasible and free from additional penalties, ultimately providing him with peace of mind and financial stability.

COMPLIANCE PHASE:

In the compliance phase, we evaluated Stephen’s income, expenses, and overall financial situation. Given his steady income and willingness to pay, we determined that a Streamlined Installment Agreement (SIA) would be the most suitable option. This agreement would allow Stephen to pay off his debt in manageable monthly installments without the need for extensive financial documentation.

RESOLUTION PHASE:

We submitted the request for a Streamlined Installment Agreement to the IRS, proposing monthly payments of $407. This plan was designed to fit within Stephen’s budget while ensuring timely repayment of his tax debt. Additionally, we identified that Stephen was eligible for penalty abatement, which could reduce his overall liability.

After reviewing our submission, the IRS approved the Streamlined Installment Agreement, allowing Stephen to pay $407 per month. Furthermore, we successfully negotiated a penalty abatement that saved him $804, reducing his total debt and making the repayment process more manageable.

Total Amount Owed: $21,000

Resolution: Streamlined Installment Agreement & Penalty Abatement

Monthly Payment: $407

Penalty Abatement Savings: $804

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.