Wednesday, June 1, 2011

Partial Payment Installment Agreement Saves 1.3 Million

Our client came to us with well over 1.5m owed in back 941 tax liability. They were also missing several 1120 tax returns, 940 tax returns, and 941 tax returns. After about a year of working with the taxpayer, keeping them protected from aggressive collection action, and working with the Internal Revenue Service, the taxpayer was finally able to file all missing returns. Upon filing all the missing returns, the business was able to stay current and compliant with all Federal Tax Deposits.

At first the IRS thought the business could pay closer to $15,000 monthly, an amount that would suffice and pay the liability off over time given the collection statute. However, the taxpayer indicated she could not afford this amount, nor did the financial data show the business could afford a large payment. The IRS also wanted to seize assets and real property to help pay down the tax liability. All seizure would do is put the taxpayer out of business and 50 people out of work. We were able to convince the Revenue Officer working the account to set up an agreement of $2,000 monthly. The IRS decided to not seize the business location or shut them down. Over the next 100 months the business will pay back $200,000.

We consider this a great resolution as it keeps 50 people employed, 50 families fed, a business going that has been open for over 40 years, and the economy in a small town alive. We take pride in what we do to save businesses across America from closing down. If we can work out an equitable resolution with the IRS and keep people employed, we know we have done our job correctly!