A husband and wife called me panicked. They owe the IRS $120,000 and have just received a certified letter. It was an LT11, a Final Notice of Intent to Levy. My first question was “Did you receive the letter within the last 30 days?”. Fortunately for them they had. They retained me and gave me a Power of Attorney. I then, within 30 days of when the letter was sent to them, requested a Collection Due Process Hearing. As such, the IRS could not levy until I have had an opportunity to resolve the case with an Appeals Officer. My clients gave me all of their financial information which I forwarded to appeals. They were a family of four and between them earned approximately $12,000 a month gross. I was then able to work out an Installment Agreement for $500 a month, an amount they could afford based on their financial situation. This amount was much less than what the IRS wanted and will not be able to fully pay the IRS over the 10 year Statute of Limitations. Due to the fact that they had substantial equity in their house and significant savings, they were not eligible for an Offer in Compromise. However, the 10 year Statute of Limitations will run before the IRS has collected all of the money and they will save a large portion of their debt.
What helped us a great deal is that I was able to protect their rights by taking their case to Appeals. The advantage to dealing with Appeals is that the Settlement Officer’s job is to resolve the case. It is the best place at the IRS to settle your case in the fastest way with the best results.
