Payment plan

[Pacun]

Let's say that your client owes 1K to the IRS and he will be paying $200 per month. Do you really need a payment plan or just make those payments until you finish? Will the IRS try to collect that $1K if you respond to their first letter with a $200 payment?

[jainen]

>> Let's say that your client owes 1K to the IRS and he will be paying $200 per month<<

Are we talking about 2006? They will let the current year go (with only an increasingly threatening letter every month or so) for quite a while. Anything older, it's probably best to set up a schedule but you can put that off for some time too. Start getting more responsive when you receive the notice of intent to levy.

[Eli]

Let's say that your client owes 1K to the IRS and he will be paying $200 per month. Do you really need a payment plan or just make those payments until you finish? Will the IRS try to collect that $1K if you respond to their first letter with a $200 payment?

He actually owes $660+, but I don't think he could afford maybe more then $25-30 a month.

Eli

[JohnH]

Pacun:

I think IRS will automatically give the client 4 months if he just calls & asks.

I handled one a few months ago by calling IRS with the client on the line. Amount due was about $3K and they were expecting some money to be received to pay off the balance. IRS dated the file forward 120 days & said they could make payments toward the balance during that time if they wanted to, or they could wait until the end of the 120 days & pay it all. There was no fee for this extended collection period, other than the normal P&I which accrued.

As it turned out, the expected windfall didn't materialize so they called back about two weeks before the end of the period & explained that the money still wasn't there. At that point the IRS just converted it to a monthly payment plan extending it out over a year, and at that time charged the fee for setting up the plan.

[redux]

Let's say that your client owes 1K to the IRS and he will be paying $200 per month. Do you really need a payment plan or just make those payments until you finish? Will the IRS try to collect that $1K if you respond to their first letter with a $200 payment?

It seems to me that the IRS, as with any creditor, simply wants to know what is intended in terms of payment. A better plan than silence, is to let the IRS know the creditor's intentions. I think that time spent in properly setting up a payment plan, which, of course, gives one proof of acceptance to the plan by the IRS, is the prudent thing to do. All parties, then know what to expect.