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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 13336
Experience:  15years with H & R Block. Divisional leader, Instructor
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Im a consultant and after lagging on tax filings for the last

Customer Question

I'm a consultant and after lagging on tax filings for the last four years, all taxes are now filed and I've made a Q1 2010 payment but I owe back taxes for the last three tax years. I have a current payment plan in place with the IRS for previous taxes and have asked to include back taxes in the current payment plan. Should I work directly with the IRS on this or look for help from a tax attorney, enrolled agent, etc.?
Submitted: 6 years ago.
Category: Tax
Expert:  Robin D. replied 6 years ago.

HelloCustomer

Thank you for using Just Answer.

If you feel that the matters being questioned or disputed by the IRS are over your head then you should seek the assistance of a professional like a CPA. The overall goal of your representative would be to limit the amount of information the IRS agent sees or requests to examine.

If you are in a payment plan with the IRS then you have already taken the steps yourself that you would have had to pay someone else to do for you. Many people want take advantage of those offers to settle for pennies on the dollar what their tax debt is. Actually, the IRS will not accept an offer in compromise unless all they feel that payments are not going to payoff the liability. An offer in compromise (OIC) is an agreement between a taxpayer and the Internal Revenue Service that settles the taxpayer's tax liabilities for less than the full amount owed.

If you are unable to pay your tax liability in a lump sum or through an installment agreement and you have exhausted your search for other payment arrangements, you may be a candidate for an offer in compromise.

 

If you find that the IRS agent is not working with you, there is the Taxpayer Advocate Service. Taxpayer Advocate Service (TAS) is an independent organization within the IRS, they help taxpayers resolve problems with the IRS and recommend changes that will prevent the problems. You may be eligible for TAS help if you have tried to resolve your tax problem through normal IRS channels and have gotten nowhere, or you believe an IRS procedure just isn't working as it should.

 

Whether you wish to use a professional will depend on your own feelings about your ability to deal with the IRS yourself.

 

I sincerely XXXXX XXXXX information is helpful,

 

Customer: replied 6 years ago.
Please let me know if I'm understanding this correctly - the IRS is likely to allow me to extend my installment plan to cover these past taxes even though the amount is much larger (current installment plan at $500 per month covers approx. $15k - new taxes owed for will be another approx.$40k).

I am not interested in an offer in compromise and do want to stick with an installment plan.
Expert:  Robin D. replied 6 years ago.

The IRS will allow you to pay off the other back taxes also. At the amount of additional tax you have stated you will be required to fill out the Form 433f and disclose your income and expenses. A new higher amount of payment will be calculated unless you can show that you have reached your level of payment and could pay no more per month.

Collection Financial Standards are used to help determine a taxpayer's ability to pay a delinquent tax liability. Allowable living expenses include those expenses that meet the necessary expense test. The necessary expense test is defined as expenses that are necessary to provide for a taxpayer's (and his or her family's) health and welfare and/or production of income. Since you are in a payment agreement already you may have experience with the Form 433f. Here is a link to the form:

http://www.irs.gov/pub/irs-pdf/f433f.pdf

 

Robin D. and 2 other Tax Specialists are ready to help you
Customer: replied 6 years ago.
Thanks so much!
Expert:  Robin D. replied 6 years ago.
You are welcome and best of luck.