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Washington Tax Services has been assisting individual taxpayers and small businesses with their past due tax troubles since 1989.  Whether you have been dealing with the IRS for years and can't get caught up, or are just now falling behind and don't know where to begin - We know the tax collection system and have the experience and expertise to get you the best results possible under the law. 

Many people who owe back taxes to the IRS can benefit from the recent Congressional guidelines which mandate that the IRS must work with taxpayers to arrange realistic repayment schedules.  Thanks to improvements in the IRS Code regarding Taxpayer's Rights, there are now several options available for setting up a Payment Plan (sometimes referred to as an Installment Agreement.)  In certain cases it is even possible to make interest-free payments on a debt without disclosing all of your private financial information to the IRS.   

The Payment Plan is for taxpayers who can't afford to resolve their entire tax debt in one lump sum without experiencing an economic hardship. This term, economic hardship, is the key to setting up a successful Installment Agreement. One could say that anyone who must pay back a debt to the IRS is experiencing an economic hardship in so much as we could all imagine more pleasurable things to do with our money than handing it over to the IRS.  As a taxpayer, you may think that not paying off your VISA debt or a loan from Aunt Mary and giving that money to the IRS instead is unreasonable.  Unfortunately, the IRS doesn't see it that way... and they never will.

In order to have a Payment Plan Request accepted which will stop Collection Action, a taxpayer must demonstrate to the IRS that paying all that is due in large payments would result in an undue economic hardship that could jeopardize the taxpayer's ability to support himself or herself and their family. This is done by rigorously demonstrating that a payment of what the IRS is demanding would result in the taxpayer taking food out of their baby's mouth, or cause them to forgo some other necessity of life in order to give that money to the IRS.  Fortunately for many people, this is not that hard to demonstrate. Other times it is a little more difficult, but there is generally some type of resolution available. 

The main benefit of setting up an Installment Agreement with the IRS is that it will put you back in compliance and you will no longer have to worry about the IRS knocking on your door or ringing your phone off the hook.  IRS Collection activity will have ceased and there will be no more threats of levy, garnishment or seizure of your wages, bank accounts, or any other property. Harassment by the IRS will end for good, as long as you stay current with the agreed upon payments.

Uncollectable Status

It's possible that if you're currently experiencing a difficult financial situation, you may actually qualify for a Hardship Deferment of collection action. If this is the case, the IRS will put you on Uncollectable Status and you would then be completely left alone by the IRS and not be required to make payments until your situation improves and you can reach a settlement.  Do not count on this, but it does sometimes work out that way.  Furthermore, you will not have to wait long for an answer. According to the IRS's internal rules, they must answer your request for Hardship Deferment within ten (10) working days of receipt of your request. THAT IS FAST!!!

In order to get put on Uncollectable Status, you must demonstrate economic hardship to the IRS.  Economic hardship, according to IRS rules and procedures, is when paying the IRS would result in undue or unreasonable hardship to the taxpayer.  To view this in the proper perspective, let's look at it from the way the IRS Collection folks do. You see, they hold all the power and most of the cards in this game. What you have going for you are some reasonable outs provided by Congress and the IRS to keep the system efficient and within the bounds of reason. It is not efficient for the IRS to spend its time and money trying to collect a large sum of money from somebody who has no way of paying that amount. Simply begging for (or demanding) Uncollectable Status from them is not going to get results. As with all Tax Resolution programs sanctioned by the IRS, the only way to achieve success is by following their own methodology to prove your eligibility.  

How to Qualify for a Payment Plan or Uncollectable Status

In order to qualify for a Payment Plan or Uncollectable Status with the IRS, you must show them using the proper forms and language that your allowable expenses are equal to or slightly less than your income. This is how you prove to the IRS that you can only pay them a little bit of the debt each month as an "affordable and livable amount", and anything more would surely result in an "undue economic hardship". Your allowable expenses are what the IRS considers the necessities of life. In general, they are food, clothing, housing, utilities, transportation, medical, and insurance and certain work-related expenditures.  Of course, as with just about everything the IRS does, there are specific formulas used to determine the amounts of these allowable expenses which take into consideration your own particular circumstances. 

Our Approach

At Washington Tax Services, we believe that the optimum Payment Plan is one that establishes a monthly amount that is high enough to be acceptable to the IRS but low enough that the taxpayer will not have problems staying current.  The key is to make sure that it is a livable Payment Plan you can afford and continue to pay without defaulting.  Problems with Payment Plans frequently arise because, in their zeal to collect everything that's owed, IRS Revenue Officers frequently coerce the unsuspecting taxpayer into Installment Amounts that are unsustainable in the long run.  If you get into a Payment Plan you can't afford, and later default, then you are going to end up in bigger trouble than you were before.

If you should decide to hire us, it will be our job to help you get a Payment Plan that fits your budget.  Simply throwing out a random number and hoping the IRS bites is not likely to get you resolution.  Rather, we will analyze your household budget using the same criteria that the IRS does, completing all of the paperwork necessary for submitting a Payment Plan and arguing your case with the IRS's own language. We will then recommend an installment amount that is both livable to you and acceptable under IRS guidelines.  Our methods have helped thousands of taxpayers save time while obtaining Real Relief

For More information on how a Payment Plan can be used to help you, please call today: