Payment Alternatives When You Owe the IRS. Phyllis Grimes March 25, 2015

Payment Alternatives When You

Owe the IRS

Payment Alternatives When You Owe

the IRS

• Welcome media

• SBSE dot webinars at irs.gov

– Questions – Feedback

Payment Alternatives When You Owe

the IRS

• IRS dot gov/Forms Pubs • IRS dot gov/IRM

• IRS dot gov/Tax Pros • IRS dot gov

Payment Alternatives When You Owe

the IRS

• Submit questions

– Not case specific

• Q&A at the end

Payment Alternatives When You Owe

the IRS

Presentation is …

Agenda

• Online Payment Agreements update • Case resolution prerequisites

• Collection Information Statements

Online Payment Agreement Update

Businesses are eligible if they … • Owe $25,000 or less

• Can pay in 24 months or less

Online Payment Agreement Update

Businesses –

• $25,000 or less

– Includes assessed penalty & interest

• Can pay down to qualify

Online Payment Agreement Update

Businesses

• If $10,001 – $25,000 owed

Online Payment Agreement Update

Finding Online Payment Agreement • IRS dot gov “Tools” or Keyword OPA Login Process

Installment Agreement Terms

• Short-term full pay agreement

– No user fee

• Monthly payments

– $52 fee if direct debit

Online Payment Agreement

Advantages • Fast

• No direct contact

OPA Update Summary

• Businesses can use if –

– Owe $25,000 or less

– Full pay 24 months or less

Case Resolution Prerequisites

• Compliance today

Cost of Non-Compliance

• Late filing penalty

– Up to 25%

• Late payment penalty

– Up to 25%

• Interest

Case Resolution Prerequisites

Case Resolution Prerequisites

Collection’s mission – • Compliance today

Help at IRS dot gov

Collection Information Statements

• Quick & easy solution …

Collection Information Statements

• No quick & easy solution …

Collection Information Statements

Roadmap to resolution …

• Currently not collectable? • Installment agreement? • Asset liquidation?

Collection Information Statements

No simple solution?

• Gather financial information

Collection Information Statements

(CIS)

Forms

• 433-F – Collection Information Statement • 433-A – CIS for wage earners and

self-employed

CIS for Offer in Compromise

CIS Form 433-F

• Short & simple • Used by –

– Accounts Management & Automated Collection (ACS)

• Used for –

CIS Form 433-F

Sample uses –

• Request for installment agreement

– Other payment options?

CIS Form 433-F

Sample uses –

• Request for temporary hold • Other payment options?

CIS Form 433-F

Can’t pay today?

• Have 433-F ready – including supporting documents

• Consider all payment options

CIS Form 433-F

If

• Early in collection process • Individual taxpayer

• No streamlined installment agreement • Can’t pay

CIS Forms 433-A and 433-B

• Comprehensive

• Form 433-A for wage earners, self-employed • Form 433-B for businesses

• Instructions

CIS Form 433-A

• Used by

– Revenue Officers

• Used when

– Liable party is wage earner or self-employed – Can’t pay in full

Allowable Living Expenses

• IRS dot gov – search terms

– Allowable living expenses

– Collection financial standards

• Guidelines providing

CIS Form 433-B

• Used by

– Revenue Officers

• Used when

– Liable party is a business – Can’t pay in full

CIS Form 433-B

• Verification –

– Balance sheet

CIS Form 433-B

Other required items • Credit cards accepted

• Payment processors used • Info on key personnel

Instructions

Collection Information Statements

Collection Information Statements

Required when – • Can’t pay

Collection Information Statements

Keys –

• Complete, nothing blank • Add attachments

• Current and verified • Submit early

References - Resources

• IRM Part 5, Chapter 15, Financial Analysis Handbook

• IRS dot gov - search

– Allowable living expenses and/or – Collection financial standards

Federal Tax Liens

General Lien References

• IRC §6321 Lien for taxes • IRC §6322 Period of lien

• IRC §6323 Validity and priority • Reg. §301.6321, 22 & 23

Liens and Selling or Financing

• Notice(s) of lien filed?

– Public records

– Account transcript – IRS at 800-913-6050

Liens and Selling or Financing

• Will sale or finance pay in full?

Lien Payoff Amount

• Publication 4235

– Local phone numbers & addresses

• Centralized lien operation

– 800-913-6050

– Address, phone & fax in Pub 4235

Lien Payoff Letter

• Payoff amount

• Good through date

Payoff Amount Disclosure

• Form 8821 – Information Authorization • Who are you?

Full Payment Summary

Sale or financing will pay in full • Get copies of lien(s)

• Contact Lien Operation 30 – 45 days in advance

• Request lien payoff letter

Sale or Finance Will Not Full Pay

What’s your plan for the remaining balance? • Payment agreement

Lien Discharge or Subordination

• IRC section 6325(b) Discharge

Discharge Example

Lien payoff – $75,000 • Sale price $200,000

• Less first mortgage $125,000 • Less closing costs $15,000

Subordination Example

FMV of property $200,000 IRS Lien $75,000

• New loan $160,000

• Less old loan $125,000 • Less closing costs $5,000

Resources

• IRS dot gov keyword “lien” • IRS lien videos

• Publication 783 – How to Apply for Discharge • Publication 784 – How to Apply for

Resources

Discharge or Subordination

Application Denied • Appeal rights

• Form 9423 – Collection Appeal Request

Discharge or Subordination

Application Approved

Payment Alternatives When You Owe

the IRS

• Send feedback

CIS Resources

• Internal Revenue Manual (IRM)

– Part 5, Chapter 15, Financial Analysis

• IRS dot gov – search –

– Allowable living expenses

– Collection financial standards

Lien Resources

• IRS dot gov search “liens”

• IRS Videos dot gov – IRS Liens

• Publication 783 – How to Apply for Discharge • Publication 784 – How to Apply for

Subordination