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taxmanrog, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 638
Experience:  Licensed CPA, MA, MST with 31 years' experience. Teach Accounting and Tax courses at Masters level.
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Hello We owe the feds a good deal sum-70K. We set up an installment

Customer Question

We owe the feds a good deal sum-70K. We set up an installment agreement in July to pay $300/month. We have subsequently paid them !000 in August, then $300 in Sept and $300 in Oct.. We have NEVER received recognition of these payments, just letters asking to be paid in full as they tack on an additional 200 or so a month! We send a copy of our installment agreement with each payment! Again, today we get a letter with a blank installment agreement and a "pay in full in 2 weeks." What do we do. I diligently have sent them copies of the original agreement each time
Submitted: 3 years ago.
Category: Tax
Expert:  taxmanrog replied 3 years ago.

Welcome to Just Answers! Thank you for giving me the opportunity to assist you! I will do my best to help!


First of all, the IRS usually does not acknowledge receipt of payments received under an installment agreement. You have to keep track of them yourself. Simply go online and print out a copy of the canceled check and keep it with your tax records.


The IRS can be really screwed up when it comes to collections. The problem is that their computers keep automatically spitting out the notices of balances due, and no one tells the computers to stop.


Your best bet would be to go to your local IRS customer service office and personally talk to someone. There should be a revenue officer in the collections area who could talk to you. Make sure you bring with you the original installment agreement you set up in July, along with copies of your canceled checks and copies of the notices that they continue to send you.


Be patient, as the IRS moves slowly, especially in light of the recent government shutdown.


I am sorry I don't have a better answer, but that is what you need to do! I hope this helps! If so, please rate me highly. I would appreciate it!


Again, thanks and good luck! Have a great weekend!



Customer: replied 3 years ago.
What about the $200 plus they tack on each month due to my "unresponsiveness?" Do those get knocked off? Do you know where the nearest IRS office is to me? (94536 zip code) Thankfully, I have never had the joy of paying them a visit I make an appt? any suggestions?
Expert:  taxmanrog replied 3 years ago.

The IRS has five offices within a 50 mile radius of your Zip code. You an see them if you go to:


All of them are walk-in centers, which means that you can just go there without an appointment and talk to someone. They all do have a phone number as well. Personally, I would probably call the office I wanted to go to, and explain the situation to the person who answers the phone. They will transfer you to the proper revenue agent in the collections area, and you can make an appointment. I feel this is better because even though it may be more inconvenient (you have to call ahead, you have to work around their schedules) it will save you time. I have heard of people waiting hours to see the right IRS person at a walk in office.


As far as the interest, again, that is a computer adding it to your account. If you talk to a revenue officer, they should be able to get those removed, as you do have an installment agreement.


On another issue, have you considered calling a tax attorney? Not one of those that advertise on late night TV or radio promising to settle for $0.10 on the dollar, but a real, reputable one? They do work! I had one client owe the IRS almost $400k, and they were able to reduce it significantly! To under 20% of what he owed! Now, he had a unique situation, but it was still done!


I hope this helps! And I wish you luck! If you have any more questions, please let me know.


Again, thanks!



Customer: replied 3 years ago.
I am glad that you bring this up..most of this money came from us pulling out money from an IRA to pay for college tuition. No penalty, but massive tax. Plus I had three client payments to me that were an oversight in my reporting. All very "vanilla' and honest stuff..I asked our CPA about this-and he said that because we own 2 homes here in Calif that we would not be a candidate for an offer and compromise. What do you think? House rich and cash poor. We do hold mortgages on both. Any hope for our type of profile?
Expert:  taxmanrog replied 3 years ago.

If that is the case, I am sorry to say I agree with your CPA. The exception would be if you were underwater on the residences. If you had very little equity in them, you might be able to get some consideration.


Was this amount mostly taxes? Or are there substantial penalties in there as well? I have been fairly successful in getting the IRS to abate penalties. Your CPA should be able to help out in that area as well.


I hope this helps! If you have any more questions, ask away! I probably won't be able to answer until later in the morning, as it is now late & I have to get up for church early!


Thanks again!



Customer: replied 3 years ago.
Thank you. I will take your advice..the amount is mainly taxes..the penalties were waived because this was tuition related. Would it be best to try to find a way to pay if off in full? It would be a hardship to refi again ..its already tight now with monthly payments..what do you think?
Expert:  taxmanrog replied 3 years ago.

The IRS interest rates are low, probably lower than you could get on a personal loan or even on some equity lines. The current IRS rate is 6%, and it is not deductible. So, if your money is appreciating higher somewhere else, then do not pay the IRS off. However, if the return you are currently getting is lower, or you could borrow against the house and the new house payment would be lower than the current house payment plus the IRS installment amount, then pay it off.


I hope this helps! If you have any more questions, please let me know. If you have found my answers helpful, please rate me highly. I would appreciate that!


Again, thanks and have a great weekend!



taxmanrog and other Tax Specialists are ready to help you
Customer: replied 3 years ago.
Thank you
Expert:  taxmanrog replied 3 years ago.

You are very welcome! If you should have any tax questions in the future, please request me by stating "Taxmanrog only" or "This is for taxmanrog" in the first line of the question. Some experts will respect that, others won't. If someone else answers, just say you want me.


Again, thanks! Enjoy your Sunday!