Payment Alternatives When You Owe the IRS. Phyllis Grimes March 25, 2015

Transcription

1 Payment Alternatives When You Owe the IRS Phyllis Grimes March 25,

2 Payment Alternatives When You Owe the IRS Welcome media SBSE dot webinars at irs.gov Questions Feedback Contact information 2

3 Payment Alternatives When You Owe the IRS IRS dot gov/forms Pubs IRS dot gov/irm IRS dot gov/tax Pros IRS dot gov Search collection 3

4 Payment Alternatives When You Owe the IRS Submit questions Not case specific Q&A at the end Subject Matter Experts will answer 4

5 Payment Alternatives When You Owe the IRS Presentation is Educational/Informational Not official guidance 5

6 Agenda Online Payment Agreements update Case resolution prerequisites Collection Information Statements Selling or refinancing property when there s a tax lien 6

7 Online Payment Agreement Update Businesses are eligible if they Owe $25,000 or less Can pay in 24 months or less Are current with filing/paying requirements 7

8 Online Payment Agreement Update Businesses $25,000 or less Includes assessed penalty & interest Can pay down to qualify Pay down Then apply 8

9 Online Payment Agreement Update Businesses If $10,001 $25,000 owed Direct debit payments required 9

10 Online Payment Agreement Update Finding Online Payment Agreement IRS dot gov Tools or Keyword OPA Login Process At Date Business Established Enter month/year EIN assigned 10

11 Installment Agreement Terms Short-term full pay agreement No user fee Monthly payments $52 fee if direct debit $120 if payments by mail 11

12 Online Payment Agreement Advantages Fast No direct contact Immediate approval 12

13 OPA Update Summary Businesses can use if Owe $25,000 or less Full pay 24 months or less All payment terms/options available Advantages over calling/writing 13

14 Case Resolution Prerequisites Compliance today Compliance tomorrow Compliance in the future 14

15 Cost of Non-Compliance Late filing penalty Up to 25% Late payment penalty Up to 25% Interest Until full balance paid 15

16 Case Resolution Prerequisites No current/future compliance No easy resolution 16

17 Case Resolution Prerequisites Collection s mission Compliance today Compliance tomorrow Compliance in the future 17

18 Help at IRS dot gov Keywords Withholding Estimated taxes Small business Payroll taxes Filing or paying late 18

19 Collection Information Statements Quick & easy solution No financial information required 19

20 Collection Information Statements No quick & easy solution Financial information required 20

21 Collection Information Statements Roadmap to resolution Currently not collectable? Installment agreement? Asset liquidation? Offer in compromise? Combination of above? 21

22 Collection Information Statements No simple solution? Gather financial information Prepare Collection Information Statement Provide to IRS 22

23 Collection Information Statements Forms (CIS) 433-F Collection Information Statement 433-A CIS for wage earners and selfemployed 433-B CIS for businesses 23

24 CIS for Offer in Compromise Form 433-A (OIC) Form 433-B (OIC) Only for offers 24

25 CIS Form 433-F Short & simple Used by Accounts Management & Automated Collection (ACS) Used for Individual & self-employed taxpayers 25

26 CIS Form 433-F Sample uses Request for installment agreement Other payment options? Installment agreement approved? File notice of tax lien? 26

27 CIS Form 433-F Sample uses Request for temporary hold Other payment options? Temp hold appropriate? File notice of lien? 27

28 CIS Form 433-F Can t pay today? Have 433-F ready including supporting documents Consider all payment options Provide 433-F to accounts management or ACS 28

29 CIS Form 433-F If Early in collection process Individual taxpayer No streamlined installment agreement Can t pay Then 433-F required 29

30 CIS Forms 433-A and 433-B Comprehensive Form 433-A for wage earners, self-employed Form 433-B for businesses Instructions Publication 1854 How to Prepare Form 433-A Publication 5059 How to Prepare Form 433-B 30

31 CIS Form 433-A Used by Revenue Officers Used when Liable party is wage earner or self-employed Can t pay in full Don t qualify for streamlined payment plan 31

32 7 sections Personal Employment Other financial Asset Income statement Business Sole-proprietor CIS Form 433-A 32

33 CIS Forms 433-A & B Keys No blank lines Attachments as needed Current information Verification 33

34 Allowable Living Expenses IRS dot gov search terms Allowable living expenses Collection financial standards Guidelines providing Consistency Fairness 34

35 CIS Form 433-B Used by Revenue Officers Used when Liable party is a business Can t pay in full Don t qualify for streamlined payment plan 35

36 CIS Form 433-B Verification Balance sheet Income statement Cash flow analysis Bank statements Cancelled checks Receivables Other 36

37 CIS Form 433-B Other required items Credit cards accepted Payment processors used Info on key personnel Instructions IRS Publication

38 Collection Information Statements Roadmap to Resolution 38

39 Collection Information Statements Required when Can t pay Don t qualify for streamlined installment agreement 39

40 Collection Information Statements Keys Complete, nothing blank Add attachments Current and verified Submit early Work with Collection 40

41 References - Resources IRM Part 5, Chapter 15, Financial Analysis Handbook IRS dot gov - search Allowable living expenses and/or Collection financial standards Publications 1854 & 5059 How to prepare Forms 433-A and B 41

42 Federal Tax Liens Selling or Financing When There is a Tax Lien 42

43 General Lien References IRC 6321 Lien for taxes IRC 6322 Period of lien IRC 6323 Validity and priority Reg , 22 & 23 IRS dot gov search lien 43

44 Liens and Selling or Financing Notice(s) of lien filed? Public records Account transcript IRS at Get copy of lien(s) Contact IRS 44

45 Liens and Selling or Financing Will sale or finance pay in full? Notice of lien amount not equal to payoff amount 45

46 Lien Payoff Amount Publication 4235 Local phone numbers & addresses Centralized lien operation Address, phone & fax in Pub 4235 Payoff letter 46

47 Lien Payoff Letter Payoff amount Good through date Lien release information 47

48 Payoff Amount Disclosure Form 8821 Information Authorization Who are you? Who gets your information? What information? 48

49 Full Payment Summary Sale or financing will pay in full Get copies of lien(s) Contact Lien Operation days in advance Request lien payoff letter Provide Form 8821 Information Authorization 49

50 Sale or Finance Will Not Full Pay What s your plan for the remaining balance? Payment agreement Offer in Compromise Other 50

51 Lien Discharge or Subordination IRC section 6325(b) Discharge IRC section 6325(d) Subordination 51

52 Discharge Example Lien payoff $75,000 Sale price $200,000 Less first mortgage $125,000 Less closing costs $15,000 Equals IRS lien interest $60,000 52

53 Subordination Example FMV of property $200,000 IRS Lien $75,000 New loan $160,000 Less old loan $125,000 Less closing costs $5,000 Equals IRS lien interest $30,000 53

54 Resources IRS dot gov keyword lien IRS lien videos Publication 783 How to Apply for Discharge Publication 784 How to Apply for Subordination 54

55 Resources Publication 4235 Collection Advisory Group Numbers and Addresses 55

56 Discharge or Subordination Application Denied Appeal rights Form 9423 Collection Appeal Request Publication 1660 Collection Appeal Rights 56

57 Discharge or Subordination Application Approved Conditional commitment letter 57

58 Payment Alternatives When You Owe the IRS Send feedback SBSE dot webinars at IRS dot gov 58

59 CIS Resources Internal Revenue Manual (IRM) Part 5, Chapter 15, Financial Analysis IRS dot gov search Allowable living expenses Collection financial standards Publications 1854 &

60 Lien Resources IRS dot gov search liens IRS Videos dot gov IRS Liens Publication 783 How to Apply for Discharge Publication 784 How to Apply for Subordination Publication 4235 Collection Advisory Group Numbers & Addresses 60