An installment agreement is best described as a payment plan entered into between the taxing authority (whether it be the IRS or State) and the taxpayer. Most often these agreements are in writing. There are a variety of payment plan types available to both businesses and individual taxpayers. Both the IRS and State taxing authorities have income and asset criteria that is typically considered in determining if one qualifies for certain types of agreements. In most instances, full financial disclosures must be made before an installment agreement will be considered by the IRS or State taxing authority. The professionals at Dartmouth Financial will review with you those plans for which you qualify and submit appropriate proposals for installment agreement to the IRS and/or State taxing authorities.
The IRS and many States have programs referred to as Offer In Compromise; programs that allows a taxpayer to propose a specific monetary settlement, less than the full tax liability, to settle the tax liability. These settlements may take the form of a one time payment, or a series of payments made over time. Each State is different and some States do not have an offer in compromise program. Most States require a full financial disclosure. The IRS has the most defined offer in compromise program. In submitting an offer in compromise to the IRS, full financial disclosure is required and the amount a taxpayer must offer is calculated by considering equity in assets, liquidity and net monthly future disposable income (calculated under IRS criteria). If you qualify, the professionals at Dartmouth Financial will discuss with you whether the Offer In Compromise is your best resolution option.
Currently not collectible status is commonly referred to as CNC. It is a designation most used by the IRS for those individuals or businesses that cannot reasonably enter into a payment plan or installment agreement due to financial circumstances. If your circumstances are such that you cannot reasonably make a monthly or other periodic payment to the IRS, the IRS will consider your request for currently not collectible status. A request for CNC must be in writing and must include an appropriate full financial disclosure. The professionals at Dartmouth Financial will analyze your financial condition and if you qualify would work with you to prepare for submittal to the IRS your request for currently not collectible status. This designation, CNC, is subject to periodic review by the IRS, typically between 1 and 2 years.
The IRS and those states that allow a penalty abatement (full removal of penalties) or reduction of tax related assessed penalties require a showing of reasonable cause. We carefully examine whether your circumstances are such as to meet the reasonable cause criteria of the taxing authority or authorities involved. If reasonable cause exists, we will work with you, prepare and submit the appropriate request(s) for penalty abatement or reduction to the taxing authority or authorities involved. Many individuals have seen the television commercials or listened to the radio advertisements that promote the notion that almost every business or individual can have tax, penalties and interest significantly reduced or eliminated. Unfortunately, such is not the case. These misleading advertisements have made the IRS and States taxing authorities wary of abatement and penalty reduction requests. Don’t be fooled by outright promises to abate penalties and interest. An understanding of your particular personal and financial situation is absolutely necessary before such commitments can be made by competent professionals. The IRS and/or state taxing authorities will entertain serious written requests for penalty abatement or reduction. We will work closely with you to determine if your particular circumstances are such as to qualify for an abatement or reduction of penalties.