Installment Agreement Request

[ILLMAS]

Hello to all, a TP client of mine asked if I could amended an installment agreement request for 2008 to include the tax due for 2009. I really haven't had a case like this before, I have included various years in one installment request, but not gone back and added a year. If this is possibly, I would combine 2008 + 2009 tax due and just state it's for two years?

Thanks

[kcjenkins]

The basic problem with this is that part of every installment agreement is the understanding that the taxpayer will keep current for future years [which this is]. Note the CAUTION at the top of the form. He'll need to call that number to get permission to amend his current agreement.

[JohnH]

I'll add a comment to KC's based on a couple of past experiences. I called IRS in two different situations with the client conferenced in on the line and had no trouble getting the installment agreement amended to include the current year's liablity. Just lay out the circumstances and ask for the collection agent's help, being sure to let the client know they should also maintain that attitude while on the phone.

The main thing to consider is if the amount owed is under $25K and the payment amount requested will pay off the balance (including P&I which will accrue), over 5 years. (Dividing the amount owed by 43 will give you a good approximation of the minimum payment they will accept). Meet those tests and approval is virtually automatic, although they willl charge a new installment agreement fee to do the reset.

If you get a cranky collections person the first try, find a reason to end the call and then try again later. No sense wating your time on a power-hungry jerk when there are plenty of very nice people working for IRS.

[joelgilb]

And I'll add to both KC and John.

You are essentially negotiating a New Installment agreement and IRS is usually going to agree, but will often ask that you get your client to correct his withholding or estimated payments to stop this from happening in the future.

Also, if like John said the amounts are over 25K, you may have to tak additional steps. You almost always need a 433F or 433 A at that point and IRS will generally require support for some of the financial statement numbers.

Never yet had them not accept a new agreement though.

Joel