Announcement

Collapse
No announcement yet.

Lump Sum Payment to IRS

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Lump Sum Payment to IRS

    A client owed a fastiduous amount of $$ last April 15th, and decided to create an installment plan with the IRS. A heavy amount is drafted out of his bank account every month. Still owes about $25K at $2K+ per month.

    Client makes substantial money, and has saved up enough money to pay them off. But his bank will not stop the monthly drafts as they are sent to draw against his account by the IRS. He wishes to pay them off, but fears they will continue to draft his account.

    The literature says your kindly and neighborly IRS has a procedure for doing this, and all will be well, everyone will be happy, the clouds will part, and little children will run at the playground under sunny skies. This pastoral image does not match the IRS that I have dealt with for 35 years.

    Instead, I see botched processing, overdrafting, correspondence, collection letters, etc.

    Anyone have a good idea how to best deal with this??

    #2
    I'm puzzled by the bank's response. This is a draft drawn against HIS bank account, not a levy. The draft is set up at the customer's discretion, so IRS should not have any control over the authorization of the draft. As a matter of fact, he can stop the draft any time he chooses, even if doing so caused him to default on the payment arrangement - the bank doesn't have a dog in this fight. I think someone at the bank is blowing smoke because they don't know what to do and they're afraid of the IRS. Time to go over their head at the bank (or change banks).
    "The only function of economic forecasting is to make astrology look respectful" - John Kenneth Galbraith

    Comment


      #3
      Bank's Dog in the Hunt

      The client also happens to be a bank director. He tells me the bank cannot stop it.

      He may not know the full details, or I may not be getting the story straight, but if he is a director, I can't very well tell him to have the bank stop. He tells me they much have a release from the IRS. His execution of Form 9465 gives IRS control of the draft, according to him...

      Comment


        #4
        Originally posted by Golden Rocket View Post
        The client also happens to be a bank director. He tells me the bank cannot stop it.

        He may not know the full details, or I may not be getting the story straight, but if he is a director, I can't very well tell him to have the bank stop. He tells me they much have a release from the IRS. His execution of Form 9465 gives IRS control of the draft, according to him...
        Can one command a bank to stop just any draft? Like, one drawn by an insurance company for a policy you no longer need?
        What is the procedure for all others? I think you'll find it the same. In order to stop Alabama Power from drawing my payment each month I must work through that company.

        Why not send a check in for the balance minus about 3,000, then contact IRS when the check has posted and see what it can do?
        ChEAr$,
        Harlan Lunsford, EA n LA

        Comment


          #5
          Reading the bottom of the 9465, it does say that you must contact IRS to stop the draft. I can see how that would make the client nervous. I've never had one stopped by a client and wasn't aware of that. I have stopped other types of drafts before (non-IRS transactions) , but maybe it depends upon the wording in the original draft agreement.
          "The only function of economic forecasting is to make astrology look respectful" - John Kenneth Galbraith

          Comment


            #6
            As Harlan Lunsford said above, it seems to me that once the IRS gets paid (if the taxpayer sends in a separate payment); then the IRS will stop making the monthly debits under the installment agreement. It is hard to pin down whether the last one of the debits will get stopped depending upon what date the taxpayer pays off the entire amount due. Yes, the taxpayer will eventually get back any excess paid, but that might take some time.

            Comment


              #7
              I just want to know what a fastiduous (fastidious?) amount is. Is each bill hand washed and then ironed before sending to the IRS?

              Comment


                #8
                Golden Rocket Language

                Down here, what schools exist are always having to stop guys from using the word "bodacious." We have to grow up with this kind of verbage on the farm, at ice-cream suppers, and even at home at the dinner table.

                Yankee teachers who relocated down here from Massachusetts immediately noticed this horrifying debauchery of the English language and feared greatly their students would amount to no good and descend into a lifetime of ignorant speech. So they began a crusade to stop boys from calling things "bodacious." When Golden Rocket was growing up, these teachers promised if he could stop using "bodacious", he would be warmly accepted in the creme-d'-le-creme of upper society.

                Thus began a litany of an entire culture of hackneyed words and expressions. Golden Rocket also refers to people such as "Oprah Windows" and the "Guatemala Sauce" what comes from avocados.

                While you're at it, Gary2, why don't you come down and stay awhile? You might not wanna go back....
                Last edited by Snaggletooth; 10-05-2012, 12:06 AM.

                Comment


                  #9
                  Possible Solution

                  Have the Taxpayer pay off all but $4,000 - $5,000 of the debt and then let the IRS finish the process off with the monthly automatic payments. I would make sure to leave at least 2 months worth of payments on the books so the machinery has time to process everything.

                  Comment


                    #10
                    Originally posted by Snaggletooth View Post
                    Down here, what schools exist are always having to stop guys from using the word "bodacious." We have to grow up with this kind of verbage on the farm, at ice-cream suppers, and even at home at the dinner table.

                    Yankee teachers who relocated down here from Massachusetts immediately noticed this horrifying debauchery of the English language and feared greatly their students would amount to no good and descend into a lifetime of ignorant speech. So they began a crusade to stop boys from calling things "bodacious." When Golden Rocket was growing up, these teachers promised if he could stop using "bodacious", he would be warmly accepted in the creme-d'-le-creme of upper society.

                    Thus began a litany of an entire culture of hackneyed words and expressions. Golden Rocket also refers to people such as "Oprah Windows" and the "Guatemala Sauce" what comes from avocados.

                    While you're at it, Gary2, why don't you come down and stay awhile? You might not wanna go back....
                    Usually, the clue that they are deciding not to go back is when they stop saying "I'm preparing to go to the store" and begin saying "I'm fixin' to go to the store".
                    "The only function of economic forecasting is to make astrology look respectful" - John Kenneth Galbraith

                    Comment

                    Working...
                    X