The National Taxpayer Advocate’s 2017 Annual Report to Congress suggests that the IRS has done little to protect vulnerable taxpayers from its private debt collection initiative. The main vulnerability comes from private collection agencies setting up repayment terms that fell within the streamlined guidelines, which taxpayers can obtain without submitting financial information.
Often, a streamlined repayment option puts the debtor in a situation where the payments are more than they can afford. While the IRS offers repayment options that are based on the ability to pay, the report found private collection agencies are pushing for repayment based only on streamlined conditions.
It is important to know that like most debts, when back taxes are owed to the IRS, you can find a repayment option that does not amount to paying the liability in full. If you have fallen upon hard times or are simply facing a debt that is beyond your means, completing a financial information statement is the first step in determining your eligibility for alternative repayment options.
At 20/20, we believe our team of Enrolled Agents provides the best representation money can buy. We work with taxpayers to regain their footing and develop a resolution that works for them. At the same time, we recognize that there are many who simply cannot afford to hire a representative for themselves. In these cases, it is important to know that there are Low Income Taxpayer Clinics. According to their website, “Each clinic determines whether prospective clients meet income guidelines and other criteria before agreeing to represent them or provide consultation services.” If you feel you might be a candidate for their assistance, we encourage you to reach out and ask for help. In the event you don’t qualify, contact us and see how we can help. Ultimately, the difference in going it alone versus having representation could be a costly one.