Past-due Taxes & IRS Installment Agreement

Delinquent Tax Payment Options

The Tax Practice has successfully removed levies and garnishments, subordinated liens, and negotiated hundreds of installment agreements.  If you owe taxes from prior years and are paying the debt through a garnishment and/or bank levy, The Tax Practice can eliminate the enforced collection and establish a manageable installment agreement.

The IRS added a new type of installment agreement option, making it easier for clients to settle their obligation without the burden and expense of the traditional Offer-in-Compromise process.

Under the new Partial Payment Installment Agreement (PPIA), clients may be relieved of part of their debt, based on inability to pay.  To establish a PPIA, the years that can be paid in full must be determined before the expiration of their respective collection windows.  Those years that cannot be fully paid will be closed as uncollectible.  Under previous regulations, clients unable to fully pay their liabilities could not enter into an installment agreement, effecting a forced offer-in-compromise.  This plan is well suited for clients owing large amounts for prior periods. It also benefits clients with volatile cash flows – as monthly payments may be adjusted without penalty.

If a PPIA settlement or Offer-in-Compromise requires a partial lump sum payment financed with client real estate equity, lien subordination is often necessary.  A brief explanation follows: The IRS may file a federal tax lien on a client’s real property to secure and protect the government’s interest – creating a Catch-22 scenario.  The presence of the federal lien discourages most mortgage lenders from issuing new debt to a client because the government’s interest is superior to that of the lender.  By requesting lien subordination on the client’s behalf, our firm may effect needed financing to close the PPIA or Compromised settlement.