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Posted by suited.jacks on August 14, 2007, 3:43 am
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I failed to file taxes for a few years, and ended up owing
about $10,000 in back taxes. Early last year, I worked with
the IRS to file and setup a payment plan to take care of
this. The IRS person that I worked with put me on a plan
paying $290 per month, as a direct payment from my bank
account.
I called this morning to find out how much I had remaining
on my debt, and was informed that in a little over a year,
my debt had gone UP from ~10,000 to just over $17,000.
Does that sound right to anyone else? Is this a normal thing
to be put on a payment plan that guarantees your debt will
almost double in a year? Do I have any recourse on this if
it is true?
My alternative is looking at bankruptcy, which I am very
loath to do.
Any help is appreciated.
John
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Posted by Mike Wellman on August 14, 2007, 3:57 pm
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suited.ja...@gmail.com wrote:
> I failed to file taxes for a few years, and ended up owing
> about $10,000 in back taxes. Early last year, I worked with
> the IRS to file and setup a payment plan to take care of
> this. The IRS person that I worked with put me on a plan
> paying $290 per month, as a direct payment from my bank
> account.
>
> I called this morning to find out how much I had remaining
> on my debt, and was informed that in a little over a year,
> my debt had gone UP from ~10,000 to just over $17,000.
>
> Does that sound right to anyone else? Is this a normal thing
> to be put on a payment plan that guarantees your debt will
> almost double in a year? Do I have any recourse on this if
> it is true?
Yes, payment plans that do not reduce the overall liability
are common - but NOT in your case. A $290 per month payment
would pay off a $10,000 liability in a little over three
years. It may be that when you entered into the agreement
the tax was $10,000 but the interest and penalties had not
been applied yet - or perhaps another adjustment was made or
another tax year added. You can order a Transcript of
Account to see what has happened.
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by PaulTry on August 14, 2007, 3:57 pm
Please log in for more thread options suited.jacks@gmail.com wrote:
> I failed to file taxes for a few years, and ended up owing
> about $10,000 in back taxes. Early last year, I worked with
> the IRS to file and setup a payment plan to take care of
> this. The IRS person that I worked with put me on a plan
> paying $290 per month, as a direct payment from my bank
> account.
>
> I called this morning to find out how much I had remaining
> on my debt, and was informed that in a little over a year,
> my debt had gone UP from ~10,000 to just over $17,000.
>
> Does that sound right to anyone else? Is this a normal thing
> to be put on a payment plan that guarantees your debt will
> almost double in a year? Do I have any recourse on this if
> it is true?
>
> My alternative is looking at bankruptcy, which I am very
> loath to do.
I'd guess that the initial $10,000 was the total tax on late
filed returns, and the $17,000 includes tax, penalty and
interest. It's not the payment plan that caused the amount
to almost double, it's the penalty and interest that accrued
because you didn't file and pay timely. Bankruptcy won't
help you yet. Income Tax debt can't be discharged until it
is well aged. Even then, the tax lien will continue on your
non-exempt assets. Offer In Compromise acceptance is
unlikely on this relatively small amount with ample
collection statute remaining. $290 per month on $17,000
seems fair.
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Harlan Lunsford on August 17, 2007, 12:02 am
Please log in for more thread options suited.jacks@gmail.com wrote:
> I failed to file taxes for a few years, and ended up owing
> about $10,000 in back taxes. Early last year, I worked with
> the IRS to file and setup a payment plan to take care of
> this. The IRS person that I worked with put me on a plan
> paying $290 per month, as a direct payment from my bank
> account.
>
> I called this morning to find out how much I had remaining
> on my debt, and was informed that in a little over a year,
> my debt had gone UP from ~10,000 to just over $17,000.
>
> Does that sound right to anyone else? Is this a normal thing
> to be put on a payment plan that guarantees your debt will
> almost double in a year? Do I have any recourse on this if
> it is true?
>
> My alternative is looking at bankruptcy, which I am very
> loath to do.
Since you mention back taxes were a certain figure (10,000),
you didn't include interest and penalties which IRS has
assessed. Get a transcript of your account and you'll see
what was added and when. From now on however, only interest
and failure to pay penalty will be assessed.
ChEAr$,
Harlan Lunsford, EA n LA
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Brew1 on August 17, 2007, 12:02 am
Please log in for more thread options IRS will accept a payment plan that pays off the initial
amount in 60 months (or less). $290x60=$17,400
Sounds like you were somehow unaware that you owed $17,000
when the plan was set up. Interest will continue to accrue,
but your debt will shrink.
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ------------------------------------------------------- >>
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