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jgordosea, Enrolled Agent
Category: Tax
Satisfied Customers: 3159
Experience:  I've prepared all types of taxes since 1987.
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getting interest and penalties decreased or waived

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I have a 50,000 tax bill with the IRS (corporate). I can afford 400 per month for 10 years to repay it; however, If interest and penalties continue it will never be repaid. I have no assets. Just went through chapter 7 and house went deed in lue.

Is that tax debt owned by you or by the corporation? What type of corporation do you have?

How old the tax debt? When it was assessed?

Customer: replied 8 years ago.
Reply to LEV's Post: I have an S-corp. I am the president and my wife is the vp. The corporation does not show any profit for the past few years. When we filed for chapter 7 it included an SBA loan, who sold the equipment to repay the balance on the loan.

the tax debt runs from 09/2004 to 03/31/2007.

my wife has her own business, which is ran as a sole proprietor and just opened last year. She does not show any profit as well at this time. We would like to minimize her exposure since we need her income to help with our monthly personal bills.
Did you file bankruptcy for S-corporation?


Whether or not the $416 that the IRS says is the minimum payment it will accept is enough to fully pay the debt (plus the interest and penalty) does not stop you from paying that amount, which you say that you can do.

The IRS can accept an installment agreement that will not fully pay all the interest and penalty before the time that is allowed for collection runs out. This is referred to as a Partial Payment Installment Agreement (PPIA).

See Legislation Allows Partial Payment Option at for more information, including:

Taxpayers who request a PPIA must provide complete and accurate financial information that will be reviewed and verified. Taxpayers will also be required to address equity in assets that can be utilized to reduce or fully pay the amount of the outstanding liability.

In addition, taxpayers granted PPIAs will be subject to a subsequent financial review every two years. As a result of this review, the amount of the installment payments could increase or the agreement could be terminated, if the taxpayer's financial condition improves.

The PPIA payment option will provide an appropriate payment option for many taxpayers. Those who qualify for the PPIA option will be strongly encouraged to make their payments via the direct debit option.

So, you can accept paying the $416 now; but will have to supply financial information in the future and the minimum amount may change based on your situation at that time.

Interest can not be waived unless the IRS has made some error in figuring the interest. Penalty can sometimes be waived; but is usually based on reasonable cause as to why the tax was not paid when due. (Not having the money to pay the IRS; but paying other bills is not reasonable cause.) Whether a request for waiver of penalty is still available depends on the history of your case. It is worth your time and effort to sit down and discuss your specific case with a tax practitioner experienced in penalty abatement (such as an Enrolled Agent ) to explore if a request still can be submitted (or if it is worthwhile to try to get appeals reconsideration in your case). Many tax professionals will disucss your situation to see if you are a potential client at little or no cost to you.

I hope this helps you to understand that a Partial Payment Installment Agreement is available.

Best wishes.

Customer: replied 8 years ago.
Reply to LEV's Post: no. i did file chapter 7 personally.
Customer: replied 8 years ago.
Reply to John Gordos EA's Post: is the enrolled agent the irs agent or a special tax professional?

Hello again,

See NAEA : What is an Enrolled Agent? : An Enrolled Agent (EA) is a federally-authorized tax practitioner who has technical expertise in the field of taxation and who is empowered by the U.S. Department of the Treasury to represent taxpayers before all administrative levels of the Internal Revenue Service for audits, collections, and appeals.

See also Find an Enrolled Agent to find a representative, if you choose. Or, ask around for a referral.

I hope this helps.

jgordosea, Enrolled Agent
Category: Tax
Satisfied Customers: 3159
Experience: I've prepared all types of taxes since 1987.
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