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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 10097
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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I had owed the IRS $236,543 in October 2011 for income taxes

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I had owed the IRS $236,543 in October 2011 for income taxes from 2004 - 2009. I entered into an installment plan in October 2011 for $658 per month. I have made these payments for the past 2 years. I am being forced to retire due to health problems, as I am now 67 years old. I will be living on $1184 in social security benefits and about $20,000 in savings. I will not be able to continue to pay $658 a month. What are my options.
XXXXX XXXXX

Lane :

Hi Gary,

Lane :

You essentially have two options: (1) Negotiating a new or existing installment agreement or (2) an offer in compromise

Lane :

To ask for a change in amount, you need a Form 433-D. You can get this and download it from IRS website here : http://www.irs.gov/pub/irs-pdf/f433d.pdf
On the 1st page, there is a "Date of increase or decrease" statement, so there is way to decrease your payments

Lane :

That was option (1) ... Option (2) is an offer incompromise. Here'w what IRS says on that:


Offer in Compromise


An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can't pay your full tax liability, or doing so creates a financial hardship. We consider your unique set of facts and circumstances:



  • child">Ability to pay;

  • Income;

  • Expenses; and

  • Asset equity.



Lane :

They actually have an offer in Compromise pre-qualifier on their site here: Offer in Compromise Pre-Qualifier

Customer:

They are showing a balance of $40,000 for 2007 & 2009. Paid off 2008, and showing no balance for 2004 - 2006. Do you think they will settle this in an offer in Compromise.

Lane :

Given your change in circumstances, they might. You CERTAINLY have a good chance of lowering the amount of payment based on BOTH the good record and change in icome

Customer:

Thanks

Lane and 2 other Tax Specialists are ready to help you

Thank you Gary.

Good luck.

Be proactive and you'll be fine here.

Lane

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