Streamlined IA available?

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  • #43136
    Brian Barto
    Participant

    TP owes about $100,000 from several prior years. Already had an installment agreement in place and making their payments. New debt on 2019 return is $30,000. Because they have new debt AND already have an existing IA, does that disqualify them for a Streamlined? If I understand correctly, in ALL cases that do NOT qualify for streamlined, TP must complete 433. Am I correct?

    Additional info: Sch C client, they make about $100,000 net income each year. Likely a full-pay situation.

    #43141
    Brian Barto
    Participant

    Update on this: The taxpayer and spouse (no dependents) has income of $157,000. Rent their house. Own 2 cars, no other significant assets (according to brief conversation). Based on rough calculations, they may have an RCP as high as $5000/mo. (I do not know health insurance, life insurance or if they have other secured debt, but I think I have everything else). They are currently paying $3500/mo and, of course, they think that is alot. What to do in a situation like this? Any way to help this client other than teach them how to do a budget? If we present financials to IRS, I assume it is possible IRS will say, “ok, you have ability to pay $5000/mo”.

    I guess the question becomes, what are the client’s goals? By increasing payment and coaching them/forcing them to cut expenses, they will obviously pay down debt faster. (perhaps I am answering my own question)

    I don’t see any possibilities that do not include full pay.

    #43142
    Eric Green
    Keymaster

    Brian I think you are correct. If they provide a 433-A the IRS will want the $5,000. You can call and ask if the non-streamlined $250,000 over CSED is available and what that would be. I would play it as “Client’s are struggling and asked if the plan could be reduced, and dont want to spend the money doing a 433-A and submitting all that. Maybe the IRS can adjust it, but dont be surprised if they wont without a 433-A. If they wont then just state you’ll explain it to the clients and see what they want to do and if they want to pursue modifying it you’ll call back.

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