I continue to deal with clients owing more than $50K. When requesting an installment agreement for balances more than $50K, the IRS states it will automatically file a federal tax lien. That can obviously be detrimental to the taxpayer for many reasons.
I discovered a 180 day extension full payment option for taxpayers owing more than $50K. This option gives the taxpayer 180 days to pay the balance below $50K in order to set up an installment agreement AND avoid a federal tax lien. Also, IRS collection activity is suspended during the 180 days.
This has been useful for me in quite a few cases, especially where we agree with the balance owed and the taxpayer is able to pay down the balance below $50K within the 180 day period.
Once requested, the IRS will send a letter stating the terms of the 180 day extension full payment.
P.S. I haven’t been able to find the IRM section covering this procedure but it has been verified by multiple IRS representatives.
Peter, per IR 2020-248 they changed the procedure and extended the short term IA from 120 days to 180 days. The IRS is now reviewing the cases and determining if this will be a permanent change or if they will change it back to the original 120 days. Stay Tuned.