Free Killer IRS Tips
In my 25 plus years of representing taxpayers, I’ve never known the IRS to be able to take any collection action when the following items are in place. We used to call this the “magic five”. Since then, the IRS has changed their administrative practices. Some representatives may not feel it necessary to go to this extreme. I personally feel that if you want the best guarantee that the IRS won’t take collection action against you when you owe them money, and you have agreed to make payments, that you should make sure the following is in place.
The two things the IRS does…
- Make sure the IRS has a manager signed a copy of the installment agreement form 433D, and that you have a signed copy, if the 433D was used for your agreement. If you did an agreement over the phone or with ACS and not a revenue officer, make sure you get a letter stating the periods in the agreement and the terms of the agreement. If it doesn’t state the periods, call ACS and confirm what years are part of the agreement. Make sure all years are covered.
- This may be hard to obtain, but you need to ask for the agreement code. It will be a two digit number such as 60, 53, etc. 53 is the code for an uncollectable or CNC agreement.
The three things that you do…
- File all tax returns on time. This includes any returns you are responsible for; business and personal. I’ve seen revenue officers break installment business agreements when the owner filed their personal return late. Returns must be postmarked by the due date.
- All taxes must be paid and logged in to the IRS computer system by the due dates. Again, company taxes as well as personal income taxes must be paid on time. Estimated taxes must be paid quarterly if you don’t have withholding (or enough withholding) taxes taken out. You could have a zero liability at the end of the year and still break your agreement because you missed your second quarter’s estimate. Luckily many IRS employees fail to enforce this. No new liabilities whatsoever can come out on your record of account for any type of tax or period.
- The payments under the agreement must be logged in the IRS computer system by the due date of your payments. It is not sufficient to send them certified, or have it postmarked prior to the due date.
After 1,000’s of cases, plus discussions with other practitioners, I’ve found that there were no IRS collection action ever taken when these items were in place.
Please call us if you have questions concerning the need for solid, experienced and professional help.
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