COLUMN from DEAN ALEXANDER: This Installment / IRS Employees Obstructing Tax Help Intended By Law

Published Thursday, June 7, 2012 at 11:08 am

By Dean Alexander

Background: I had instructed my client to pay down the debt from $120,000 to $50,000 to be eligible for the new streamline Installment agreement threshold. My client borrowed $70,000 on his credit cards to pay it down to the $50,000 goal.

In my conference with the IRS I asked to pay off the balance under the new streamline guidelines. The IRS employee after asking me some financial questions said she could not offer me the tax relief I was seeking and rejected my request saying that the client can pay $4,100.

I reasoned with her that my client, in good faith, incurred a seventy thousand dollar credit card debt to go under the fifty thousand dollar threshold and now you are asking for more than four thousand dollars a month, as if we have done nothing. She said the tax problems were created by his financials and that the financials dictated that position.

I said that the financials that I sent to the IRS on January 12, 2012 offered a better tax resolution showing that he can only afford a little over one thousand dollars. She said that she does not have the financials. Her system does not show that she received it because it went to the Austin service center.

I had already agreed with her to get sixty days to come up with twenty thousand dollars if my client can do it in order to further reduce the debt and go streamline under twenty-five thousand with no questions asked. She agreed to hold IRS collection actions such as IRS levy or garnishment.

But in the course of the conversation I offered to give her the full financials on the phone, the ones that she said she did not receive, and do an agreement, if not on the basis of the fifty thousand streamline but on the basis of the financials as under the regular method of ability to pay based on the financials.

She then said if you give me the financials on that basis I will file a tax lien on your client. Trying to avoid the tax lien, especially since I have sixty days to find a solution  for the tax debt (possible with another more reasonable employee) I agreed not to present her with the financials seeing that she was determined to vindicate her position and to justify it without any backtracking or a better tax relief.

She said that her manager supported her position, a practice that I found invariably and methodically true. Managers having the ears of an IRS employee act like a rubber stamp since I did not have a chance to argue my case. Even if I talk to them it is usually hard to overturn an IRS employee’s position and get the needed tax help for back tax issues.

I told her that I prefer a tax resolution to this issue without going to taxpayer’s advocacy. I also stated that her position or the rules that she is following violates the spirit of the law. I tried to avoid ascribing the harsh position she took on her, but that the tax problem that I am encountering was because of the rigidity of the law, knowing full well that if she wanted to, she could have made my life and my client’s life much easier, instead of insisting that we pay the full fifty thousand dollars in less than a year when in fact the law gives us six years.

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