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Can I Add Tax Owed to an Existing IRS Installment Agreement?

greenbergladev on January 15, 2024

For many individuals, paying off entire debts in one go isn’t an option. Fortunately, there are alternatives, and the IRS installment agreement is one such solution. This approach allows taxpayers to strategize their debt payment, making it more manageable and preventing additional financial strain and further legal troubles with the authorities, such as levies.

Now, what about owing additional taxes and incorporating them into an existing IRS installment agreement? The good news is that it’s possible. However, the feasibility depends on many factors. Continue reading to learn more about the details of installment agreements, eligibility criteria, the process of adding more tax owed to an existing IRS installment agreement, and more!

Understanding IRS Installment Agreements

An IRS installment agreement is a payment plan that allows taxpayers to settle their debt over time. The payment plan offers both short-term and long-term payment options. Short-term agreements involve clearing the debt within 180 days, while long-term agreements can extend up to 72 months.

To qualify for a short-term payment plan, individuals must have a total balance of less than $100,000 in combined tax, penalties, and interest. For a long-term payment plan, individuals with a combined tax liability, penalties, and interest of $50,000 or less and businesses with $25,000 or less in combined debt meet the eligibility criteria.

You can apply for these installment payments online.

Note that interest and late-payment penalties will continue to be accrued on the unpaid debt during the installment agreement.

Adding New Tax Owed to an Existing IRS Installment Agreement

While the IRS typically doesn’t allow taxpayers to have two separate installment agreements, adding a new tax debt to an existing installment plan is possible. However, taxpayers must act swiftly before the IRS assesses the new tax balance and potential default occurs, triggering enforcement actions.

How to Add New Tax Debt to Payment Plan

Conditions for Adding Debt

The IRS evaluates various factors when determining eligibility for incorporating new tax debt into an existing agreement. These considerations encompass the individual’s financial situation, payment history, total debt amount, and compliance with tax filing obligations.

Besides the specific rules and restrictions on different types of installment agreements, the IRS may also impose limitations based on taxpayers’ financial capabilities and history of compliance. Moreover, how often individuals request modification can also affect approval. For example, frequent requests may end up in more scrutiny. Therefore, it’s advisable to follow the process accordingly and consult your trusted tax attorney. Their expertise can assist you in achieving the desired outcome.

Impact on Existing Agreement Terms

Incorporating new debt into an existing agreement can affect the current terms. Adding a new debt may result in adjusting your monthly payment plan, such as the amount of payment and the total repayment agreement. The IRS will evaluate your current financial situation, taking into account the new debt, and based on that, calculate the installment payments to ensure taxpayers can meet their obligations.

Staying informed and maintaining open communication with the IRS can help navigate these adjustments effectively.

The Process of Modifying an IRS Installment Agreement

Taxpayers can request the addition of new tax debt by using the IRS’s online payment agreement tool. Through this tool, you can revise the type of plan, payment amount, and payment due date. Individuals can also contact the IRS by phone or mail to set the changes.

The documentation required depends on the nature of the modifications. Typically, the IRS may ask for documents such as tax returns, bank information, and collection information statements (Form 433-F). Additionally, set-up fees may be charged to cover the cost of providing the installment agreement.

Seeking Professional Tax Assistance

Navigating the complexities of tax laws is challenging, and errors may lead to significant issues with the authorities. That’s why seeking guidance from a tax attorney is crucial. Our expertise, legal representation, strategic planning, and proficiency in navigating tax intricacies can ensure optimal outcomes and offer peace of mind. If you require legal consultation, don’t hesitate to contact Greenberg Law Group, P.A. Our dedicated team is ready to assist you and provide the best advice for your specific situation.

End Note

Establishing a payment plan with the IRS is a proactive way to manage your debt and avoid potential issues. Compliance with current tax laws and maintaining open communication with the IRS are essential factors influencing the approval process if you intend to add additional debt to your existing IRS installment agreement.

Don’t delay addressing your debt—reach out to us, and we’ll assist you in achieving the desired outcomes for your tax matters!

Final Notice of Intent to Levy: What it Means

greenbergladev on December 22, 2023

Receiving a final notice of intent to levy is a serious and urgent matter, marking your last opportunity to settle the outstanding debt before the IRS legally seizes your assets. While paying the entire debt immediately is the quickest resolution, there are alternative options if you can’t cover the total amount.

In this article, we’ll delve into the details of the final notice of intent to levy, explore potential solutions, and discuss how seeking assistance from a tax professional can lead to a more favorable outcome. Read on to learn more.

Understanding the Final Notice of Intent to Levy

Final Notice of Intent to Levy illustration with coins sitting on top of tax documents

The final notice of intent to levy is the IRS’s last warning, indicating their plan to seize your assets. The IRS can seize assets like cars and homes, business assets, funds in bank accounts, wages from employers, social security benefits, rights to property, and essentially anything beyond your necessities. In other words, the IRS can take almost everything, leaving you with very little.

Before reaching this final stage, the IRS typically sends multiple notices, reminding taxpayers of their outstanding debts and offering opportunities to address the issue. The message will also outline your right to appeal under IRC Section 6330, providing taxpayers with a 30-day window to file.

Receiving this final notice is common for individuals with substantial tax debt or those who haven’t taken steps to resolve it. Acting promptly and appropriately is crucial to avoid assets seized by the IRS.

Identifying a Final Notice of Intent to Levy

A final notice of intent to levy typically includes all the basic information such as the taxpayer information (name, address, social security number, etc.), the amount owed, the tax period for which the debt is owed, payment instructions, the deadline for action, taxpayer rights, and contact information.

The Legal Implications of the Notice

As the official authority for tax matters in the United States, the IRS possesses the legal authority to seize assets to settle a tax debt, as outlined in IRS Code Section 6331. Failing to respond appropriately to the letter can lead to significant repercussions, including the immediate loss of assets, financial disruption, a detrimental impact on your financial reputation, and potential legal consequences such as hefty fines or even criminal charges.

Timeframe and Deadlines

Taxpayers must pay close attention to the various timelines and deadlines outlined in the notice. Begin by checking the notice’s date; this is the starting point for the timeline and indicates the urgency of the situation. Pay special attention to the response deadline, which may involve settling the debt or exploring alternatives, like the right to appeal (which we’ll discuss further in this article).

Adhering to these deadlines is crucial for preventing the seizure of assets and avoiding legal complications.

Immediate Steps to Take After Receiving the Notice

When you receive the IRS’s Final Notice of Intent to Levy, it’s crucial to act immediately, as there are deadlines to meet.

Reviewing the Notice for Accuracy

Start by carefully reviewing the letter to ensure the information is accurate. If you spot any errors, your first step should be to contact the number on the notice or file an appeal. Alternatively, consider seeking professional advice to navigate the process more effectively.

Seeking Professional Assistance

If you have any uncertainties about the Final Notice, it’s advisable to consult with a tax professional. With their experience and knowledge, tax attorneys can guide you through the intricacies of tax laws.

Greenberg Law Group, P.A., specializes in all aspects of tax laws and can help you respond to the IRS’s Final Notice of Intent to Levy, ensuring the best possible outcome for your situation.

Possible Resolutions and Preventative Measures

Taxpayers receiving a Final Notice of Intent to Levy have several options for addressing their tax debt:

Immediate full payment: The quickest resolution is to pay the entire debt immediately. This stops IRS collection activities.

Installment Agreement: An Installment Agreement (IA) is negotiated with the IRS, allowing taxpayers to make monthly payments. Note that the IRS will continue to charge interest, but as long as fees are paid, asset seizure is avoided.

Offer in Compromise: This involves settling the debt for less than the total amount owed. Applying for an Offer in Compromise is complex, so professional help can be beneficial.

Collection Due Process Hearing: Taxpayers have the right to appeal through a Collection Due Process Hearing. You have the opportunity to discuss alternative enforcement options before levy action is taken.

CNC Status: Also known as hardship status, Currently Not Collectible (CNC) status is when taxpayers present a collection information statement. This statement demonstrates that being compelled to pay would cause financial hardship.

To avoid future levies, taxpayers must stay proactive with their tax returns—ensuring accurate and timely filing. Regularly reviewing and addressing IRS letters is essential to prevent issues from escalating. If struggling to pay taxes, initiate communication with the IRS to discuss and establish a payment plan. Lastly, consider engaging a tax attorney to ensure all aspects of your tax matters are handled appropriately and promptly.

The Role of a Tax Attorney in Resolving a Levy Notice

Navigating tax-related issues, especially when dealing with a final notice of intent to levy, is intricate and significant. Seeking the assistance of a tax law expert can not only minimize issues but often resolve and prevent tax disputes for taxpayers. If you want to avoid the complexities of managing your taxes, turn to Greenberg Law Group, P.A. We boast a team of experts ready to guide you through every step of the process. Whether it’s filing your taxes or negotiating with the IRS, we’ve got you covered!

End Note

Receiving a final notice of intent to levy shouldn’t be taken lightly, as the IRS holds the legal authority to seize your assets. To prevent this stage, it’s crucial to take proactive measures, including maintaining diligent tax filing practices and addressing issues early on.

However, if you do find yourself at the final notice stage, a tax attorney can guide you through this intricate process, ensuring you navigate the complexities of dealing with tax issues and the IRS effectively.

For trusted and professional assistance, reach out to our team at Greenberg Law Group, P.A. Our tax professionals are ready to provide the expertise you need. Let us know your specific situations, and we’ll ensure you receive the best available options.

Our Guide to IRS Audit Letters

greenbergladev on November 30, 2023

The IRS conducts audits to ensure that individuals and businesses fulfill their tax responsibilities accurately. The IRS audit letters are among the critical components of IRS audits, which are essential to understand for successfully navigating the audit process and preventing potential legal issues, but where do IRS Audit Letters come from?

Given the complexities of U.S. tax laws, it’s common for individuals and businesses to find themselves overwhelmed, potentially missing crucial details related to their tax obligations. This is precisely what our dedicated team at Greenberg Law Group is all about. We provide expert guidance to individuals and businesses, ensuring that everything is noticed and minimizing the risk of encountering problems with the IRS and the law.

Now, let’s delve into the essence of IRS audit letters, exploring their key components–what they entail, where they come from, what an IRS audit letter looks like, and ways to reduce the likelihood of running into problems with the authorities.

Where Do IRS Audit Letters Come From?

An IRS audit letter is a formal notification alerting taxpayers that their tax returns are under review. These audits comprehensively examine financial details, including income, deductions, and credits. The primary goal of an audit is to verify the accuracy of the reported information and ensure compliance with tax laws.

There are various reasons why individuals and businesses may receive IRS audit letters. The IRS may select taxpayers randomly as part of their effort to ensure tax compliance. Additionally, high-income individuals, those engaged in high-risk activities (such as high-risk investments), specific industries, non-filers, or those with discrepancies in their information may also be subject to audits.

What does an IRS audit letter look like?

To gain a clearer understanding of what an IRS audit letter entails, let’s delve into its visual characteristics:

IRS Letterhead and Official Contact Information

IRS letters include the official IRS logo and letterhead—a key sign that the communication is legitimate and not a scam. The IRS also provides their contact information, including a phone number. You can confirm the authenticity by reaching out to them directly. This ensures you are dealing with official government correspondence and not a fraudulent entity.

Taxpayer Identification and Tax Year

In addition to name and address, taxpayers can be identified by their social security number, taxpayer identification number (TIN) or Employer ID Number (EIN), and the tax year(s) under review. Taxpayers need to check and verify the accuracy of the information contained in the IRS audit letter. If any details, like your address, have changed, promptly inform the IRS to ensure precise record-keeping.

Reference Number and IRS Employee Contact

The audit letter also includes a reference number, which you can utilize for tracking and inquiries. Additionally, it provides contact details for the assigned IRS representative overseeing the audit, including their name, phone number, and address.

The Key Components of an IRS Audit Letter

Understanding the content of an IRS audit letter is crucial, as it comprises key components that demand careful attention:

1. Explanation of Issue or Discrepancy

The IRS will clearly state the reason for initiating the audit. This could stem from various issues, such as failing to report all income sources, including earnings from investments or freelance work. Other common mistakes include misrepresenting deductions, such as mixing personal and business expenses or losses.

This underscores the importance of thoroughly understanding the diverse tax laws and identifying which ones are relevant to your specific situation.

2. Request for Additional Information

When conducting the audit, the IRS may request documentation related to the issues under investigation. These documents include receipts, bills, loan agreements, employment documents, medical records, logs, tickets, and legal papers.

Take the time to understand the specifics of what they are asking for, organize your documents, and either mail in copies (not the originals) or bring the copies if the audit is conducted in person. Timely and thorough responses are essential to avoid delays and legal complications.

3. Deadlines and Consequences of Non-Compliance

Responding promptly to the specified IRS deadline is of utmost importance. Failure to meet these deadlines can result in severe legal consequences, including substantial fines and legal actions. Timely compliance avoids penalties and demonstrates professionalism, leaving a positive impression on government agencies like the IRS.

Request a confirmation when using a delivery service to ensure your documents reach the IRS on time. This precautionary step helps you track the delivery, preventing potential issues if there are delays or the mail doesn’t reach its destination on time.

How to Respond to an IRS Audit Letter

In addition to promptly providing the necessary documents and responses, there are further steps to help you respond effectively to IRS audit letters.

Upon receiving the letter, carefully examine the information it contains.
Organize the documents thoughtfully, ensuring they are clear and easy to follow.
When submitting the information, double-check its accuracy and completeness to the best of your knowledge.

If there’s any uncertainty regarding U.S. tax laws or the IRS requests, consider seeking professional assistance from Greenberg Law Group. Our team will ensure that your response to the IRS letter is comprehensive, addresses any confusion, and handles legal matters appropriately. Professional support provides a well-informed and complete resolution to the audit process.

Avoiding Future IRS Audit Letters

While it’s impossible to guarantee that the IRS won’t audit you, there are several best practices you can follow to reduce the chance of an audit and ensure that your tax return is accurate and compliant:

Ensure the completeness, accuracy, and timeliness of your tax returns. This involves accurately reporting all sources of income and maintaining a clear separation between personal and business finances.
Organize and retain all your records for future reference, as evidence, and to support your claims. Moreover, stay informed about tax laws, understand their nuances, and identify which ones apply to your specific situation.
Consider seeking professional assistance. Have your tax return reviewed by professionals to ensure compliance with the relevant U.S. tax laws, preventing future issues with the law and the IRS.

End Note

IRS audits are initiated for various reasons, and an IRS audit letter is a formal notification indicating that your tax returns are under review. Responding with confidence, clarity, and punctuality is crucial to avoid legal consequences and fines.

The complexities of complying with diverse U.S. tax laws and navigating the intricacies of an IRS audit can be daunting. This is where our team at Greenberg Law Group steps in to assist. We are the experts in tax-related matters, ensuring a smooth and hassle-free tax filing experience for businesses and individuals alike. Contact us now to learn how we can be your trusted partner in navigating IRS audits and tax obligations.

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Can I Add Tax Owed to an Existing IRS Installment Agreement?

Understanding IRS Installment Agreements