Request account transfer from Private Collection Agency back to IRS?

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  • #42911
    Brian Barto
    Participant

    Taxpayer owes $14,269. She owes for 2011 (SFR filed – Oct 2013: estimated CSED from THS 9/30/24) and 2012 (SFR filed Jul 2014: Estimated CSED from THS 3/17/25). She was single, no dep, no itemized deductions, and only had W2 income – No point in filing the returns.

    On 4/17/2018: Account put in CNC status: Is this the standard procedure before referral to the Private Collection Agency?

    On 3/25/2019 both 2011 and 2012 were referred to a Private Collection Agency.

    Installment Agreement Established 7/17/2019 with the Private Collection Agency (for both tax years).

    THS has a “Y” in the column for FTA 2011. However, in the “Return filed” column for 2010 it says NO. I assume because she never filed 2010, that FTA is out.

    I was on a webinar with Roger Nemeth from THS yesterday. He mentioned that if we send letter to the Private Collection Agency – requesting the account be sent back to IRS, that IRS is NOT Pursuing these cases – he cited IRS officials confirmed this.

    1. Anyone have any experience with that?
    Is that a good course of action? Make any difference if the Installment Agreement has already been established? Getting the account transferred back to IRS – Does that void or cancel the Installment Agreement established with the Private Collection Company?

    2. Ask for FTA every time even if we think no chance to get it?

    Additional info:
    1. Taxpayer has since married (2018) and filed MFJ for 2018. AGI $197,000.
    2. Taxpayer recently filed 2013 to get in compliance. Not processed yet – but will owe about $4000 if I recall.

    #42914
    Eric Green
    Keymaster

    Brian, you can certainly request the case be sent back to IRS, and no Revenue Officer will deal with it because it is too small, but the IRS may send an automated levy if it is not dealt with.

    I wonder why she owes so much if she was a W-2. I think it would be worth looking into and seeing if the liability can be reduced (along with the penalty and interest).

    #43683
    RUQAYYAH SHABAZZ
    Participant

    I recommend taking a look at her transcripts for the years that were SFR’d to determine if she had any federal taxes withheld on her income. If so, then there’s a possibility that filing an original tax return could possibly reduce her tax liability since the IRS doesn’t factor in credits and withholding on SFR tax returns.

    You can certainly request to have the case transferred back to the IRS. Since the debts occurred prior to her being married (and provided there’s no current joint debt), you can consider conducting a split financial analysis to determine her ability to pay based on her percentage of their joint income and expenses.

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