If You Default On An IRS Installment Plan
It happens to the best of us. You have an agreement with the IRS to pay a monthly amount, but you can no longer afford it. Perhaps it's because you run into other expenses, like taxes or medical bills, and these other expenses cause you to fall behind on a payment plan with the IRS. Or maybe a loss in income due to job loss or downsizing makes it impossible to pay the IRS. It happens.
So you’ve done your best, but the cash flow just wasn’t there to pay the Internal Revenue Service every month. Now what to you do?
Watch For a Notice in the Mail
First, keep in mind that the IRS must send you a notice of default before it can terminate your installment agreement and start collections. This notice is titled “Notice of Intent to Levy!!! You Defaulted on Your Installment Agreement.”
If you are unsure if you have received this notice, you can call us and we can find out for you. There are very important rights associated with this notice. You have 30 days from the notice of default to file an appeal to renegotiate the installment agreement.
You Must Act Immediately
It’s vital you act immediately because if you file the appeal timely, the IRS cannot take any collection action or enforce the default until your appeal hearing is completed. This is required by Internal Revenue Code 6159(b)(5) and in the Internal Revenue Manual 22.214.171.124.
We have had many clients default on installment agreement. By filing an IRS appeal on your behalf, there are three big benefits:
One IRS Appeals Officer will be assigned to your case. These IRS employees are often better suited to reach a solution. Only one IRS Appeals Officer will be responsible for your case rather than multiple IRS employees. That’s important because he or she can focus on your case and give your circumstances the consideration your case deserves.
We can renegotiate a new installment agreement and your wages, bank accounts and property are protected from IRS collection action. At the appeal, we will provide updated financial information and work to cure the default without any threat of levy.
At the appeal, we can explore other solutions such as settling with the IRS or filing bankruptcy or becoming eligible for hardship status.
It Happens - You're Not Alone
In today’s tough economic times, it’s not unusual to default on IRS installment agreement. Don’t beat yourself up about it. In fact, for many of my clients defaulting on an installment agreement opens the door to transforming a bad installment agreement into a fresh start with the IRS.
Call me for free, day or night, if you desire a fresh start with the IRS. 800 659 0525.