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My "projections" are just on the fly, off the top of my head, looking at the numbers on the state's K-1s, no calculations that take pencil & paper.... It's hard to bill enough for these blasted things! Hope you got what you were worth, Sara, for 58! I have one client with a dozen or so and a dozen in his trust, also, and other clients with six of more; of course, they all have 4-6 activities in each K-1. I really need to raise my prices on these.

When the IRS cancels an IA, they send out a letter, CP523 (upper rt corner). The default can be from a missed payment , or from being assessed additional taxes It does Not default on the date of the letter but 30 days later. There is another 10 day grace period after that to allow any payment to post. If the additional tax is small, sometimes the IRS will roll the IA over automatically. The options are an OIC, a new IA, or CNC (currently non-collectible). The easiest solution would be a streamlined Installment Agreement (IA). The balance due must be less than $50,000. If it is over that, the IRS will usually allow 30 days to pay it down. To determine the minimum payment, divide the amount due by 72 (months). If the client needs more time for the paydown, there are strategies for getting additional time. OIC, CNC, or a regular installment agreement will require documentation of income and allowable expenses.

I am usually a real stickler for rules, but some of the PTPs have 40 states listed. I am not going to look up the filing thresholds for 40 states. (I give you credit, Lion, for all those projections.) Unless I see a significant number listed, I tell the client that I am not going to do the states. If the states think they are owed money, let them alert the client. I'll take it from there if they do. In all these years, handling countless PTPs, I have never had a client get a letter from any state. When a client sells a PTP, I do complete the worksheet that comes with the K1 by hand. (Am I exonerated?) This breaks out the capital from the ordinary gain. This summer I had a client with FIFTY EIGHT of these #**?!# things, 54 of which had been sold. I spent hours and hours doing all those calcs by hand, entering them in the program, and double checking every single one. You should have seen his bill.

Thanks, Max! The letters just arrived in my mail today. They are, indeed, CP523's. I think that the amended returns showing, mostly, additional tax due, IRS claims the entire tax wasn't paid. As it happens, she did pay the balances due for 2 of the 4 years and has a refund due for one year. From May 2012 until January 2015 she had been paying $550 per month but in 2015 her extra outside self employment dried up. She negotiated on her own a decrease to $200 per month faithfully paid through September. There is no way she can pay $30,000 within 30 days. If I use the 72 months you mention, the payments are $417, probably manageable though tight. In any event, I will be on the phone tomorrow and let her know about OIC as well. Stay tuned!

Thanks for the replies. It sounds as if options are available and I will research when the paperwork arrives. This is a first for me in all my years of practice. Guess I've been pretty lucky with clients. There have been some wrinkles along the way but this is by far the most expensive situation. I took her on last year as she is engaged to a long time client who finally convinced her she would do well with professional assistance. Hope I don't disappoint! And hope I get paid... (I will, no worries, but it may be a while)

However, if she cannot make payments (insufficient cash flow) definitely check out the OIC option.

Just get a new installment plan. They get automatically canceled if you file a balance due return and you have to get a new plan. I have clients that have to do this every year. It's hard to catch up sometimes.

Always happy to share! I, too, learn much from this board. So, a big thanks to all of you for sharing your knowledge!