Tax Relief: Will Uncle Sam Understand If You Break Your Promise?
Posted by LWM Team on Wed, May 12, 2010
If you are a tax payer who made every attempt to make your tax installment agreement payments but failed, it will come as a relief to know Uncle Sam is obligated to follow a specific procedure. The IRS
may not act ruthlessly against you by terminating the installment agreement in order to collect money. There are many tax payers who made the repayment of back taxes a priority and then fell back on the current year’s tax return.
Uncle Sam is aware many tax payers try their best to keep up in spite of the weak economy. If you fell behind on your tax installment agreement (also called a payment plan), the IRS must provide you with a Notice of Default prior to terminating an installment agreement. Such a notice is called ‘Notice of Intent to Levy’ and it gives you thirty days to officially lodge an appeal. This appeal is for you to renegotiate a new installment agreement based on your changed circumstances. It is essential that every tax payer is aware that a ‘Notice of Intent to Levy’ gives you specific rights.
The Internal Revenue Code 6159 (b) (5) and Internal Revenue Manual (IRM
5.14.11.9) gives you legal protection against the IRS
collecting money or implementing any default action until after your appeal is heard and concluded. However, you only receive this protection if you appeal on time i.e. within the thirty days notice period.
While you renegotiate a new IRS installment agreement your assets, wages and bank accounts are given protection against the action of collection. Any new information regarding your finances can be specified without any danger of levy to resolve the failure to pay. You have the advantage of an IRS Appeals Officer handling your appeal rather than a number of officials within the IRS
Automated Collection Service.
If repayment is impossible, you may have to think about bankruptcy, being put into IRS Not-Collectible Status or an Offer in Compromise.
The procedure for installment agreements below $25,000 is made easy. Uncle Sam sets certain laws in motion for your protection if you follow the rules.