The staff of Washington Tax Services likes to achieve the best outcome for our customers that we possibly can. We always want to score a touchdown, like an Offer in Compromise for $1,000 against $100,000.00. However, we are obviously limited by what the IRS will accept for our clients. In some instances, an installment agreement to pay back the liability is the best thing we can do initially. How do we make a payment plan palatable for clients who want the greatest bang for their buck?
- Monitoring your tax case
We manage all of the contact with the IRS, handling all deadlines and keeping the IRS from levying you until an agreement is reached.
The average person might work too fast setting up an agreement with the IRS, particularly when some IRS liabilities are going to expire. Your tax professional should be careful entering into an agreement too fast. Furthermore, your tax professional should also be able to gauge where you stand in the collection process so your first move is a good one without haste.
- The amount of the agreement
A hastily arranged payment plan might be more than you can handle each month. Your tax professional should be able to make the agreement manageable and doable for you, utilizing the 12 month adjustable tactic to streamline agreements and other tricks of his/her trade.
- Planning ahead for a default
With your tax debt possibly expiring in a few years, you obviously want to pay the IRS as little as necessary. For this reason, you and your tax professional might team up to see if "defaulting" your agreement—which buys you about four months of no payments—can help you pay less. Then you can plan for these defaults in advance of tax debts expiring.
- Penalty abatement
If the payment plan was the only avenue for getting yourself out of the collection process, your tax professional should ask for a penalty abatement once the agreement has been honored—even if you don't have strong case for it. (Filing and paying your taxes going forward certainly helps this cause.)