Partial Payment Installment Agreement
For certain taxpayers that do not qualify for an offer in compromise, United Tax Group could negotiate a partial pay installment settlement.
The Partial Payment Installment Agreement (PPIA), unveiled in 2005, is the most recent tax debt reduction plan offered by the IRS. Commonly referred to as a “hybrid” plan, this tax debt reduction program takes into consideration the remaining amount of time left under the Statute of Limitations applicable to a particular tax debt (typically, the IRS can only attempt to collect for 10 years) and the elements used to calculate an Installment Agreement amount through the Form 433-F Financial Statement.
The amounts of money saved through this program can be as dramatic as the “pennies on the dollar” Offer in Compromise settlement and can be accomplished without the voluminous amount of information and detail required in an Offer in Compromise application. This program takes into consideration the remaining amount of time for the IRS to collect on a back tax debt and allows the taxpayer to pay a reduced monthly amount during the remaining period of time before expiration of the 10 year Statue of Limitations. For example, let’s say a taxpayer has a debt from 2000 in the amount of $100,000. Provided the tax return was timely filed and there was no bankruptcy or Offer in Compromise filing, the statutory period to collect on this debt expires on April 15, 2011. When the Form 433-F Financial Statement is prepared for the taxpayer, it is determined that he or she has a discretionary income of $400 per month to pay the IRS. There remains only 10 months (as of July 15, 2010) to collect on the debt. In this circumstance, the IRS has the ability to accept a payment of $400 per month for the remaining period (10 months) as full payment on the original debt of $100,000. This allows the taxpayer to settle his or her debt for as little as $4,000. Of course, every taxpayer’s situation is different and savings will depend on the applicable facts and circumstances.
Contact United Tax Group to see if you qualify. (877) 829-3703