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Written by Scott Allen

Arizona State tax debt

Arizona State Tax Debt

Debts owe to the State of Arizona are handled by the Arizona Department of Revenue.  Settlements and are handled very much the same way as they are with the IRS.  There are some important differences.  I advise clients to first file and settle with the IRS and then file and settle with the Arizona Dept. of Revenue (AZDOR) in most cases.  If you are filing old returns from prior years, Arizona will often wait until the IRS accepts the federal return before accepting a return filed with them for the same year.  Also, the State of Arizona is much more aggressive on collecting taxes on smaller amounts owed than the IRS is on larger amounts owed.

It is best to make your decisions on settlement once you know what you will owe to both the IRS and AZDOR and your ability to make payments on your combined tax debt.  There are some situations when settling up with the State before settling with the IRS makes more sense.  A consultation with a professional representative will help avoid painting yourself in a corner on one tax debt and leave you vulnerable to serious financial troubles in dealing with the other.

Scott Allen E. A.

Tax Debt Advisors, Inc

www.stopIRSaction.com

 

IRS Problems, IRS Tax Payment Plan, Unfiled Tax Returns
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Regular Post
Written by Scott Allen

Will the IRS reinstate my payment plan if I default?

IRS, Please reinstate my payment plan

Yes, if it is the first time you have defaulted and you contact them as soon as you can after failing to make your payment.  In most cases you will have to bring yourself current on the payment due and the payment missed to be reinstated.

If you have defaulted more than once, and you are an employee, the IRS will likely garnish your paycheck for the monthly amount.   If you have defaulted and are several months behind, the IRS will likely require new financial information to verify the amount they want you to send in each month.  This can be a good thing.  If you have been unable to make your monthly payment because your income has gone down or an allowable expense has increased, the IRS will reduce your monthly payment accordingly.

There are some situations when strategically defaulting on a payment plan should be done to reduce your payment.  If you are considering this, you should make sure your actions will improve your resolution of the tax debt.  This would be a good time to have a consultation with a resolution specialist. Scott Allen EA is located in Mesa Arizona and you can schedule an in person or phone appointment to discuss your specific situation.

Scott Allen E. A.

Tax Debt Advisors, Inc

www.stopIRSaction.com

 

IRS Problems, IRS Tax Payment Plan, Tax Attorney Arizona
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Regular Post
Written by Scott Allen

Can I adjust my monthly payment plan with the IRS?

Monthly Payment Plan with the IRS

The answer is yes.  If you want to send in more, just send the addition amount you want to  send.  The IRS will always accept more and will not adjust your monthly requirement just because you start paying more.  However, remember that no matter how much you send in, you still have to pay the minimal amount due each month.  You do not build up any “credit” towards future payments by sending in more.

If you situation has changed and you want to lower your monthly payment plan with the IRS commitment.  That is possible too, but it will require a “strategic default.”  Before you default on making your payment, you should have a good idea what your new monthly amount the IRS will expect.  We advise our clients what their new amount will be ahead of the strategic default.  When the default notice comes, we are prepared ahead of time to immediately call the IRS and renegotiate a new payment plan before any levy action is taken against our client’s wages or bank accounts.

There are probably other strategies that you are unaware of that can reduce you monthly payment plan even lower that what you are seeking.  If you do not have medical insurance or need a new vehicle you can get your payment plan reduced and improve you living standards as well.  If you need help to reduce your monthly payment plan with the IRS, call me for a consultation at 480-926-9300.

Scott Allen E. A.

Tax Debt Advisors, Inc

www.stopIRSaction.com

 

IRS Problems, IRS Tax Payment Plan, Tax Debt
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Regular Post
Written by Scott Allen

WHAT CAUSED MY IRS PAYMENT PLAN TO DEFAULT?

IRS Payment Plan Default

When you default on an installment arrangement there is no explanation.  The most common reasons are:

  • You didn’t send in your payment or your payment was late.  If you call immediately upon receiving the notice, you can usually be reinstated as soon as your payments are current.  Don’t depend on the IRS vouchers as a reminder to make your payment.  Vouchers can come to you after the due date or not at all.  Have a note on your calendar to make your payment whether or not the voucher shows up.  If you send in a payment without a voucher, include your social security number, the tax year to apply the payment (2020-1040) and have your phone number on the check.
  • You filed your return late or did not pay your taxes in full when you filed your return.  One of the conditions of having a payment plan with the IRS is that you don’t get behind on filing or paying in the future.  Again, the IRS will likely reinstate the agreement if you can bring your payments current and you contact them immediately after receiving the notice of default.  To prevent this from happening in the future make sure your estimated taxes are paid timely if you are self employed or that your withholdings are sufficient if you are an employee.

If you default and you have to renegotiate your payment plan with the IRS it is unlikely you will get the same payment amount.   If your financial situation has worsened, your payment amount will be reduced.  Likewise, if your financial situation has improved, your payment amount will go up.  Rather than just go back into another installment arrangement, I advise our clients to reevaluate to see if there is another settlement option that would be better now that their situation has changed.

There are legitimate situations where I advise clients to strategically default on purpose so that a better settlement can be reached with the IRS.  This should only be done with the help of a professional representative who can guide you through the renegotiation process. Our company has over 45 years of tax preparation and IRS negotiation experience.

Scott Allen E. A.

Tax Debt Advisors, Inc.

IRS Problems, IRS Tax Payment Plan
2
Regular Post
Written by Scott Allen

WAGE GARNISHMENT AND IRS LEVY

Ways to stop Wage Garnishment and IRS Levy

When clients contact us about a garnishment or levy by the IRS on their wages they want it removed as quickly as possible. I understand that, but it is also prudent to make sure that any “posturing” that will help the situation long term is done first.

The IRS will allow reasonable amounts for living expenses before considering what amount is available for one’s historical tax debt. Before agreeing to a monthly payment plan to get the levy released, there are a number of posturing items to resolve as quickly as possible.

First, make sure your withholdings on your pay check is correct. If you are claiming too many exemptions, correct you W-4 form immediately so that you will not owe any taxes when you file the current year return. Every additional dollar you have withheld will reduce your monthly payment by exactly the same amount.

Second, if you have a car that needs to be replaced or one that you own free and clear, you may want to consider getting a new or newer vehicle. Once you are locked in on a monthly payment amount, the IRS will file a tax lien and the lien will make it next to impossible to get a car loan. If you have an old vehicle that you own free and clear and you turn it in for a newer car, the payments you make will reduce the amount you have to pay on your historical tax debt dollar for dollar up to a certain amount. Right now that amount is $588.

Thirdly, if you don’t have health insurance consider getting a policy. Again, you reduce your monthly payment to the IRS on your past tax debt dollar for dollar on the cost of your insurance premiums. If you want health insurance instead of making a higher monthly payment to the IRS you will need to do this before the installment arrangement is entered into.

It is not possible in a short blog to list all of the items one needs to consider. Posturing can lower the amount the IRS will consider for an Offer in Compromise. It can qualify you for non-collectible status, and it can make it possible for you to discharge your taxes in bankruptcy and make no payment at all to the IRS on your past debt. Remember that these suggestions are not universal and need to be reviewed with a professional after making your representative knowledgeable of your financial affairs. Call and speak with Scott today do discuss the best settlement option for you.

Scott Allen E.A. – President

Tax Debt Advisors, Inc. – Since 1977

Mesa AZ IRS Installment Payment Plan

IRS Problems, IRS Tax Payment Plan
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