Owe the IRS and not sure where to begin?
Dealing with the IRS is intimidating. That's why tax attorney Anton Collins at StopIRSProblem.com put together this video FAQ to guide you through the conversation. Whether you have a small or large tax consequence, the information in these videos will help you make the best decision for you and your business. Have questions? Click HERE to set up a FREE 15 minute consultation with our team.
How do I call the IRS?
If you receive an IRS letter, and it says that you personally owe less than $25,000, or your business owes less than $50,000, a simplified payment agreement can be arranged by telephone. You can just call you can call the number on the IRS letter. One of their main collection numbers is always on the letter.
Just call the number on that letter and someone at IRS will speak with you. They will ask you a few questions, then will hear your situation. The IRS Collection Rep will ask for your personal data to verify your identity. The IRS will also confirm whether you have filed all your tax returns, generally considered a requirement to establish an IRS payment plan.
During this call, the IRS telephone representative will give you an amount calculated to fully pay the entire liability during the allowable time within the IRS’s 10-year collection statute. You can even ask for what is the lowest simplified payment allowable. The IRS rep will calculate, and let you know what the lowest payment is using this simple, streamlined method. Remember, usually this payment amount is usually not the best, lowest amount available. It is usually not the best payment amount for you.
Instead, this allows the IRS to collect the full amount, without any reduction of the tax, penalty and interest.
Whatever the case is, the IRS is going to give you the number that is best for the IRS to fully collect the liability during the time that IRS can collect it.
Also, you will have to wait on the phone. The IRS’s hold times are notoriously long, often 1 or 2 hours, sometimes more. Business owners and those with not-so-simple situations benefit from having an attorney.
Among the many benefits of having an attorney include:
1) Having someone else to speak to the IRS, and not waiting “on hold”,
2) Having someone negotiate with the IRS to establish a much lower payment.
Businesses that owe payroll taxes must create a Guaranteed Direct Debit Installment Agreement (DDIA) if the amount owed is between $10,000 and $25,000.
Use this method when you have a very simple situation, and prefer to have more immediate or direct feedback that by using IRS Form 9465, and you do not wish to make the disclosures required in using Form 433.
How do I set up an IRS payment agreement with the IRS? (Form 9465)
When you file your tax return, assuming that you filed all your tax returns, you can file IRS Form 9465 to set up an IRS installment agreement without an attorney. This form allows you to request a certain amount as your simple IRS plan monthly payment. IRS will determine whether it can approve the requested payment amount.
This simplified option is for individuals that owe less than $50,000. This method and this form is also available for businesses, but in limited situations. There are certain other rules to consider.
Businesses that owe payroll taxes must enter into a Guaranteed Direct Debit Installment Agreement (DDIA) if the amount owed is between $10,000 and $25,000.Use this form when you have a very simple situation, but could not afford the amount that the IRS provided by calling the IRS, but you do not wish to make the disclosures required in using Form 433.
If your circumstances are more complex, or more urgent, then filing this Form 9465 is likely not the best choice. Typically, you should rely on a tax lawyer or other qualified tax professional to establish an IRS installment agreement for a not-so-simple situation. Often this applies to “taxpayers” who are:
Under levy, or threat of levy
Already under an installment agreement
Self-Employed
Business Owners
Individuals whose liability is more than $50,000
Businesses whose liability is more than $25,000
Missing some tax returns
Where the circumstances above apply, it is often strategically helpful and economically beneficial to speak with an attorney. Rule of thumb in hiring an attorney: Ask “Why do I need a lawyer?” And if they can tell you, you should listen. And if they cannot tell you, well, you should listen to that too.
How do I set up an IRS payment plan? (Form 433)
Your IRS notices will mention the IRS Form 433-A or 433-B for business. This is a is a Collection Information Statement (or “CIS”). Tax lawyers, tax attorneys, certified public accountants, enrolled agents, and “resolution” tax professionals all work with that form.
Use this form when you have a very simple situation, but could not afford the amount that the IRS provided either by calling the IRS or using Form 9465.The IRS will review your Form 433 to see if maybe a lower payment can be justified. Be aware that on that form, you disclose a lot of your financial information. Also be aware that IRS uses the information on this form both now and later. Collected information includes your:
Full “government” identities
Job information for you and spouse
Real estate details
Banking and investment details
Insurance policy information
Cars, personal and work vehicles
Credit cards and other obligations
Personal legal history, including bankruptcies and current lawsuits
Income for your entire household
Personal expenses
Self-employment details
You must sign the Form 433, under penalties or perjury. Again, be truthful, or could become prosecuted for tax fraud.
Note: The detail here often creates conflicting answers. Often there is information that you do not wish to disclose. Be truthful. Be careful. In that event, it is sensible to speak with a lawyer. Working with experienced can result in a much different outcome.