A self-employed taxpayer reached out to us expressing he was very worried about his tax debt. He was seeking assistance from our tax team to help him gain the stress-free life he was used to prior to finding out about his almost $50K tax liability. He informed us that he thought the debt was due to an old partnership he was no longer part of, but was not sure. His self-employment was not doing great, and he was having a hard time covering his expenses so it was impossible to pay back the tax liability in full as the IRS was asking.
We began the investigation by welcoming him to the program and giving him peace of mind by expressing how professionals were taking care of the situation going forward. We then created an online account to keep track of all of his finances.
Our team worked with him to complete a financial profile including all income, expenses, assets and liabilities. After gathering all the support needed, his case was assigned to one of our expert enrolled agents. A signed power of attorney was submitted to the IRS. After obtaining the IRS transcripts and reviewing the balances for each year, including all penalties and interests accumulated, it was determined that he owed $47,954.
Our enrolled agent also made sure he was in full compliance with the IRS, meaning all tax returns were filed. It was also clarified that the balance owed was due to self-employment income where he had not paid the required taxes.
Collections were starting to become aggressive, therefore a stay of enforcement was requested to halt any collection action against him. This was approved for 30 days. Our enrolled agent reviewed his financial statement and due to not having disposable income after all necessary living expenses, our tax team determined that he was a great candidate for 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 his financial situation remains the same and he must stay in compliance with all future tax returns. With this option, he doesn’t have to make monthly payments. He agreed to have us set up the CNC Status.
The client was eager to move forward with the recommended resolution so collection action would stop and he could completely solve the situation. We assisted and guided him through the gathering of all the documents that were necessary to be presented to the IRS. We needed a profit & loss statement, bank statements, proof of expenses, copy of bills, hardship letter, etc.. Once all the supports was received, we contacted the IRS in order to get the resolution approved. After an extensive conversation with the IRS Agent the case was sent to management for approval. After 10 business days we received the approval notice with the confirmation that the customer’s account had been placed in Currently Not Collectible status.
He was thrilled with the outcome of not having to make any payments and collections stopped. It was explained that he must remain tax compliant by filing all future tax returns, making estimated tax payments and paying off any new balances on time. He also needs to provide updated financials if the IRS requests it, as those were the requirements to maintain the CNC status. There have been many scenarios in which taxpayer’s accounts reach their expiration dates while being in CNC status. By law the IRS can longer collect once the debt has reached its expiration date. The IRS will no longer demand payments from the taxpayer as long as the income remains the same.
Total amount owed: $47,954
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.