Tax Relief: Installment Agreement- Getting Declined
Posted by LWM Team on Tue, Jun 29, 2010
When the IRS Declines an Installment Agreement
There are three reasons for the IRS to turn down an Installment Agreement (IA):
• Not all living costs are deemed essential i.e., private schooling fees, high credit card purchases, charitable donations.
• Information on Forms 433-A and -B are inaccurate or deceptive e.g., public records prove you own assets that you didn't reveal or your income is higher than disclosed.
• You failed to complete a previous Installment Agreement causing the IRS to regard you as unreliable.
If an IA is turned down, continue your request with the tax officer/manager, RS Appeals Office, and tax advocate.
Revoking an Installment Agreement
Once an IA is approved, you and the IRS are bound to it. However, there are exceptions to revoking your payment plan:
• You don't file tax returns or settle taxes subsequent to the IA; the IRS monitors your returns and payments.
• Revocation is caused by non-payment or late payment; the IRS gives thirty to sixty days before sending a warning regarding revocation.
• There's a noticeable (positive or negative) change in your finances. If you keep silent they may not see it but, if the IRS notices, you must complete a new Form 433-A or -B.
• If the IRS learns you didn't fully disclose all assets and/or additional income(s) during your IA negotiations.
A Form 523 notifies you of the IRS' intention to revoke your IA. You can appeal it by using Form 9423.