Reference no: EM133768605

Application for Installment Payment Agreement general information: Following the filing of a return without payment in full or following an examination and the exhaustion or waiver of Appeals Division and the United States Tax Court options, the tax is assessed. If the taxpayer is unable to pay in full, the taxpayer may request an Installment Payment Agreement ("IPA") or may file an Offer in Compromise ("OIC") to reduce the obligation. In addition, IRS may file a tax lien of record and propose to levy on taxpayer assets. The taxpayer is entitled to a Collection Due Process hearing ("CDP") if any administrative rights were not provided or were denied. This includes after the filing of a lien, prior to a levy, and collection alternatives, including an IPA and an OIC. The United States Tax Court has jurisdiction to review adverse results of CDP proceedings. The United States Tax Court does not have jurisdiction to review self-assessed tax because there is no deficiency in tax.

Assignment:
Archie and Betty Veronica, your clients, have filed their 2020 tax return timely on 4/15/2021. They had a great year in the stock market in 2019. However, much of that was lost in 2020 when they had to sell stocks being held on margin at substantial losses due to the market mini-crash. Their cash position, at the time of filing, was bad. They were forced to file owing $54,000 in taxes for 2020. They cannot possibly pay their taxes today. They are unable to borrow any money. Your firm routinely charges $5,000 for the preparation of an installment agreement involving the preparation of a Form 433-A. Your clients understand this and are willing to pay assuming that there are no better options.

They have substantial assets, but those assets are locked up in investments that cannot be liquidated easily or quickly. They also maintain an expensive lifestyle. They are not a candidate for an Offer in Compromise.

They have received several IRS letters requesting payment. They do not know what to do. They have come to your office so that you can advise them what is the best course of action for them to take. They have asked that you provide them with alternatives and have asked you several questions. They are also fee sensitive but will pay whatever it takes if they can. They have asked you the following: 1. "If we can come up with the cash relatively quickly, somehow, can you hold off the IRS without having to go through the expense of doing an installment agreement.

2. "Assuming we cannot come up with any money at all right now what kind of an installment agreement can we get? "

3. "What needs to be filed or what needs to be done under each of the preceding scenarios in order to secure the installment agreement and if we secure an installment agreement what is the maximum amount of time, we can get to pay off our IRS debt?"

4. Will penalty and interest stop, or rates change if we enter an installment agreement? What are the current rates of interest and the penalty levels if these continue after the installment agreement?"