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Taxes



In this video, you’re going to learn exactly how to use the Installment Agreement program offered by the IRS to help taxpayers who cannot afford to pay their tax bill.

Here are the Installment Agreement strategies that I cover in the video:

First, you’ll learn how to utilize the Automatic Agreement program for those with less than $10,000 in taxes owed. In my experience, this type of Agreement is super easy to get.

Next, Gary will  explain the Streamlined Agreement. This has been expanded from $50,000 to $100,000 for 2020. Gary also suggests a simple strategy to take advantage of the benefits of this great program.

Then, I talk about how the Regular Installment Agreement works. With this, you need to work with financial statements in order to get the IRS to accept your Offer.

Lastly, I review the Partial Pay Installment Agreement to get around the 10-year Statute of Limitations.

I concluded with practical tips to avoid accidentally defaulting on your Installment Agreement. If you default, the IRS will void your agreement and you have to start all over again.


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Founded by Gary Massey, Massey and Company is a boutique CPA firm in located in Atlanta, Georgia serving the needs of small businesses and their owners.


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Taxes
If you are an Atlanta taxpayer that owes taxes to the government, you can stop IRS collection activity by being deemed Currently Not Collectible. Once you obtain this status, the IRS will stop sending you nasty letters about your tax debt.  And most importantly, the IRS will not be able to seize your assets.  The IRS will, however, file a lien on your property.  This will hurt your credit rating and will make it harder (but not impossible) to sell your property.

For the IRS to consider you not collectible, you will have to provide your financial statements to the IRS.  There is significant work required to prove that you are not collectible. However, the effort is often worth it, given the right facts and circumstances. Furthermore, there is planning that you can take advantage of to improve your numbers, such as maximizing allowable expenses. 


The Math Behind Being Not Collectible


First, calculate net equity in assets (home, car, investment portfolio, etc.). Second, calculate gross monthly income, less allowable expenses. If these calculations show no funds available to pay the tax, then you will be deemed not collectible. 

You can use current income numbers for purposes of the calculation. This helps your case if you have recently lost your job or had a recent decrease in earnings (such as during the pandemic).     

It is not a problem to obtain not collectible status if you have “dissipated assets” (assets disposed of in the past several years). However, dissipated assets are a problem if and when you apply for an Offer-in-Compromise. 

If banks will not let you borrow against the equity in your assets, that equity may be excluded from the net available equity in assets  calculation. This exception is not allowed in the case of an Offer-in-Compromise.
 


How Long Does Currently Not Collectible Status Last?

It is important to note that Currently Not Collectible status is temporary. The IRS will check in with you every year or two to see if your situation has changed. With that said, the 10-year statute of limitation will continue to run during the period that you are not collectible. With good planning, the statute of limitations may expire while you are not collectible.  If so, the IRS will write-off your tax debt in full, and the tax debt will simply go away. 

If you would like to learn more about how our firm can help represent you before the IRS, visit our Home Page.

Click here to watch our YouTube video on this topic!


Massey and Company is a boutique CPA firm in located in Atlanta, Georgia serving the needs of small businesses and their owners.


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