Trying to Give Money to the IRS

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I am the only lawyer in my family. From the moment I was accepted to law school I began to accumulate friends and family clients who were convinced that I knew off of the top of my head the answers to any and all legal questions and problems they had.  The accumulation of friends and family clients has not abated in the over 40 years since I started law school.  On rare occasion a friends and family client will actually have a problem I might possibly be competent to resolve.  I am involved in one such case now and am beginning to question my competence.

This friends and family client suffered in the recession like many of my regular low income clients. It is interesting to me how many clients I continue to have whose root problems with the IRS can trace directly to the recession.  In this case the friends and family client had a side business dependent on discretionary spending of relatively wealthy individuals.  Even the relatively wealthy were impacted by the recession which meant his business went south in a hurry which meant he needed money to cover the expenses which meant he did not make his estimated tax payments from his day job because he needed that money which caused him to not file his returns which landed him eventually in a big hole with the IRS.  This friends and family client makes a fair amount of money placing this family well outside my normal low income client experience.  I pointed them to a return preparer who could get them current.  They already had some problems based on returns they did file early in the lifespan of the recession.  With the assistance of the preparer, all back returns were prepared and filed and now an installment agreement needed to be set up.

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I thought setting up an installment agreement would be within my competency level. So far, that has proven not to be the case.  About six weeks after the filing of the four back returns bringing this client into compliance, I called the IRS.  The amount owed exceeded $100,000 and the clients had few assets of value but an income stream that produced a reasonable collection potential (RCP) of over $10,000 per month.  My first call to the IRS began well with a wait time in early March of less than five minutes.  The IRS employee was pleasant but firm that there were two missing returns.  I was not involved in mailing the returns to the IRS so I am unsure whether they traveled together in one envelope or in four separate ones.  Somehow two of the four returns did not make it into the returns processing system.  So, I contacted my clients and had them reexecute the two missing returns, send them in separate envelopes and try the filing process again.

I then waited another four weeks. I did not want to wait too long because the first two returns were now assessed and the collection process underway.  In my second phone call, I again reached the IRS quickly and I reached the most helpful of the IRS employees I have encountered on this case.  He said that one of the returns had processed but the other had not so he could not enter into an installment agreement with me yet.  I questioned him about the amount that would be necessary to set up an installment agreement under the general facts of the case.  He told me about a program the IRS had under which it would accept an installment agreement from my clients if they could pay within six years.  He placed the account in suspense for 60 days and told me to call back in a few weeks after the last return had time to process.

On my third call in an effort to pay the IRS, I again reached the IRS employee quickly. After we went through the obligatory five minute Q&A session to identify me and my clients, this employee began to take the asset and income information that could lead to an installment agreement.  I began to get my hopes up that I might finally close the deal and get the IRS to take their money; however, she had some questions about their expenses that I had not anticipated and could not answer.  Since the answers to these questions would only change the amount of their monthly RCP from one high number to another high number and since I was prepared to offer an installment agreement that would pay off the liability in less than six years, I questioned the employee concerning the need for this information.  If the IRS had a program to accept an installment agreement that would pay off the liability within six years, and if it were convinced there were no assets to liquidate to satisfy the liability (the clients had already sold their house and paid down most of the originally assessed debt through that closing), why did it need details that would only result in changing the amount of their monthly income available to pay an installment agreement when I was offering to enter into an installment agreement to satisfy the liability more quickly than their guidance permitted?  I did not receive a satisfactory answer to that question but ended the conversation and went to the clients to get the additional information.

On Friday the 13th of May (I should have known better), I placed my fourth call to the IRS to try to give them money.  This time I had to wait 25 minutes to get through.  I was not expecting that amount of wait time because it had gone so quickly in the prior three calls but I had plenty to do while waiting.  When the IRS employee answered the phone and I shook off the lobotomy that the IRS music had performed on my brain, we went through the obligatory five minute Q&A session at the end of which he said that he could not handle this case and that he needed to transfer me to someone in collection.  I thought I was in collection because I had pressed the number for ACS but I then waited another couple of minutes before another person answered the phone.  This person gave their name and ID# in the quick fashion that many IRS employees do when they first answer the phone.  I was writing down the name and number as I do when I am speaking to someone on these calls.  Before I said anything the person stated, “I have had no answer and am terminating this call.”  And she did.  She had no answer because she had asked no question.  I started speaking as soon as she said she had not heard an answer but it was too late.  She had already hung up.  Another half hour of my life semi wasted.  Add it to the list.

Almost immediately another call came in which I needed to take so the hang up may have been fortunate. If the IRS employee behaves that way perhaps that was not the employee I wanted to deal with anyway.  I can think of several glass half full reasons why the termination of the call after 6:00 PM on a Friday afternoon was not the worst thing to happen to me but it was frustrating.  So, I will call again one day when I am free to work on my friends and family case and try once more to give the IRS money.  Who knew it would be so hard to give them money.  Most of my clients have little money and my calls involve trying not to give them money.  I understand when the IRS is not so responsive to my requests to give them less than is owed.  When I am trying to full pay, I did not think I would be so incompetent in sealing the deal.

Comments

  1. Jim Malone says:

    Two observations: The case is large enough that you may get a revenue officer assigned to it. That may help, or it may make things worse, depending upon who you get. You also may want to consider filing a request for an installment agreement.

  2. John Cocklereece says:

    Keith
    My sympathies go out to you. Dealing with the IRS is frustrating. Business schools should use them as an example of how NOT to handle customer service. The only positive thing I can say about your experience is you are lucky you are calling now and not a few years ago. Back then, regardless of the time of year, they played an endless loop of the Nutcracker. Some days I thought I would put a gun to my head.

  3. Louis Wooten says:

    Unfortunate I find grumpy IRS employees on the other end of the 1-800 normal more and more common. The level of professionalism at IRS has declined significantly in my 25 years of practicing. Much of that, I suspect, can be attributed to budget cuts and being asked to do more with less, but that does not make it any less frustrating.

  4. Keith – I have had the same experience, and it baffles me that the IRS will not accept money. I kept saying “We want to pay you the tax due in total over a six year period”, and I couldn’t get anyone to say “Okay”, until I got an Appeals Officer involved and even then she was reluctant.

  5. Russell Dunn says:

    Welcome to my world. Having left the employ of the IRS in 1989, I have done my fair share of collections cases. Your experience is not unusual; I’d even say it was typical. In these circumstances, I ask my clients to make voluntary monthly payments in the amount of the desired IA, while the request for an appeal of the denial of a request for an installment agreement is pending. CAP, CDP, and TAS are also helpful tools in your belt. I taught the IRS Practice and Procedures courses (components of Research, sometimes, at the local state universities in South Florida for 17 years. I’ve seen this world go from bad to worse.

  6. Franke Paulett says:

    Keith, no need to feel incompetent regarding your troubles with the IRS collection employees. Since retiring from the IRS 15 years ago I have been dealing with the IRS and its notices at least weekly for a CPA firm I worked for and more recently on my own clients. I have seen a dramatic decline in the quality of IRS personnel. For years I could write one letter or sometimes one phone call and resolve the issue.

    Now it often takes several letters having to make the same arguments over and over and the responses often do not address the issue but most often they just indicate they received my response and it will take another 45 days to resolve the issue. I have received the same “another 45 days” letter 5 times for one client and finally got the Taxpayer Advocate involved. They initially refused to get involved because the IRS was not ignoring me since they were responding every 45 days and I had to send the TPA the IRS manual provision that covers the above situation and they then agreed to take the case and resolved the issue.

    It is now rare for me to speak to someone competent at the IRS and have had similar problems as you described getting hung up on, etc. I’m sure that the budget cuts imposed on the IRS by Congress has had a negative impact on service but the service now is just hopeless.

  7. Bob Kamman says:

    Why not just file Form 9465 with the tax returns? My only question there is whether attaching it to more than one return will confuse the bureaucracy. (Not applicable to your case, but for amounts less than $50,000 the 9465 can be filed online.)

    It’s not unusual for return processing to take more than four weeks, especially with prior-year returns when IRS is in the middle of current-year tax season. They can only feed so much data to the antique computers at one time, you know. Filing a second return before the first one is processed just gums up the works for both.

  8. Laurie Conner Jarrett, EA says:

    Your client doesn’t qualify for the Fresh Start 6 yr/ 72 month agreement ( I call it the “quick and easy”) because he/she owes more than $ 50,000. If your client can pay the liability down to $ 50,000 or less he/she would then qualify. When the balance due is more than $ 50,000 financial information must be provided and the IRS “national standards” for living expenses would be applied. These cases are worked by the Nonstreamlined Unit ( accessible through the Practitioners’ Hotline) if still in notice status or by ACS if the case has progressed forward in the system. ACS’s authority level is ~ $ 250,000 at this time, I think, so this case is well within their authority. They will require documentation of expenses which exceed the IRS national standards. So a $ 100,000 case can take a while to come to fruition. As one of my colleagues likes to say “patience is needed.”

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