IRS-OIC Question

[southernbelle]

I don't know if anyone here has any experience with this or not, but I'll ask anyway. I'm still waiting for my BK to close and the IRS has liens filed. I'm planning to file an OIC with the IRS and they won't accept it until my case is closed. I've talked to the lady handling my case while it is in BK and she says it's best to wait to send payments until the case closes. I am an asset case.

My question is: Does anyone here know if I can send payments without reprisals from the IRS if I don't have an "official" Installment Agreement or OIC filed? I don't want to have my paycheck garnished/levied, but didn't want to send the paperwork in for an IA or OIC until February.

The reason is, I worked overtime during the hurricanes, which was a one time deal and I don't want to submit an OIC with those paycheck stubs because it will look like I make lots more than I normally do and I don't want to artificially create a problem with my income. I worked about 85 extra hours in a 2 week span of time so it is significant, but probably won't ever happen again.

Anyone with any experience in this area? Can I make voluntary payments on my own without fear of a levy from the IRS?

[HHM]

I am a little confused by your question...are you asking
1. If you send payment will anything bad happen as a result of sending a payment, or
2. Will sending a payment without a formalized IA or OIC prevent enforced collection?

The answer to both questions is NO.

The real question, is why would you if you don't have too. Also, I thought you were doing a chapter 13 to pay the IRS. When did you decide to go the OIC route?

Practical advice, if you are going to be submitting an OIC, then don't send a payment. If you are going to be submitting an IA (installment agreement), send a payment in the amount you would be offering for the IA to establish that you can afford that payment.

[southernbelle]

I've spoken to a few Chapter 13 atty's in my area and none of them seem to give me much hope on filing a successful chapter 13 with the amount of taxes I owe and they all say an OIC might be best. They all say they would try, but don't hold out much hope of success and I'm really not in the mood to go through all of that for nothing.

My question isn't in reference to wheter I should send a payment at all. I am wondering about the timing of sending a payment. If my only options left are an OIC or IA, I would like to wait to submit the paperwork until the 3 month look back at my pay stubs doesn't have the bonus money on it which will artificially inflate how much my take home is. To do this, I would need to wait 3 months before sending the OIC paperwork.

I just want to know if they would wait 3 months while I prepare the paperwork or if my case closes this month, or will they expect an IA shortly afterwards.

Sorry, I didn't include the bad news from the atty's I met with. It's been a roller coaster ride that's only half way over.

I guess the answer is: they will expect a formal IA or OIC shortly after my case closes and the extra income will probably get counted in the 3 month look back.

[scubaman]

Hi SoutherBelle
My Attorney filed an emergency BK7 on 11/10. This was due to the fact that I was going to be getting a levy from the IRS before I could make any arrangements with them for a IA or OIC (however might do a BK13) so my Attorney has said this will stop any actions from the IRS until my BK7 is final. The automatic stay applies to IRS rules as well. A % of the taxes FED taxes I owe are going into the BK7 once this is clear I will have a better Idea of what my balance will be etc.. Hope this helps.
Take care and keep me posted to your success with the IRS.

[HHM]

Southern===do you have a revenue officer involved or are you dealing with ACS (automated collection service)?

[HHM]

Southern===do you have a revenue officer involved or are you dealing with ACS (automated collection service)?

[southernbelle]

Thanks scuba, my BK will close at the end of this month, so the Automatic stay will expire then which means they will probably start sending collection letters again.

HHM, I have a local revenue officer assigned to my case, although right now the person that has my file is the BK Insolvency Specialist that works closely with the revenue officer.

Do you think I would be able to have the revenue officer review my OIC? I would prefer it if I had someone local looking at it, not saying that it would help my chances any, but if she needs add'l information I could easily deal with her because she is in close proximity to my home.

[HHM]

Well, the RO has nothing to do with and OIC. An OIC goes the OIC see unit for review and can take up to 24 months before a decision is rendered. However, once you have submitted the OIC, no collection action can be taken against you until a decision has been made.

You have some time, since the BK happened, your account is no in the RO's inventory, it is with the BK dept. Once your case is closed, it will take some time before your file is back in the hands of the RO. Once there, I would simply call the RO, tell her you plan on submitting an OIC, will need 2 months and ask her to not levy. Depending on the circumstances, and since you did file BK, he/she will probably agree.

[scubaman]

SouthernBelle how did you get set up with an RO? I was just beginning negotiations with the ACS last week. My CPA will be helping me with the OIC. Do you suggest that maybe I contact the IRS and ask for a local RO in my area (my Attorney told me last week not to contact anyone at the IRS that they would take it from here).

HHM not meaning to skirt tail SouthernBelle but I have similar tax issues except mine are my payroll taxes from the sell of stocks. About 50k 1 time in 2006 it was due to the company I work for that backdated stock options. This is why I am filing BK because I will never have this money again because my broker Lehmans sold it to pay a margin call.
Thanks for any advise.

Thanks SouthernBelle for sharing your situation.

[southernbelle]

Thanks guys. As usual, HHM has put my mind at ease. I thought the RO would be able to review it as well. Good information to know. I am considering filling it out and submitting it myself along with some advice from a Tax Atty in my area on a few issues. Submitting it myself might be as successful as paying $2500, especially since the forms and instructions are online along with the worksheets.

Scuba, the way I got into this mess was from an unscrupulous ex husband that stole money from my business and did not file returns or pay Payroll taxes. I guess my mistake was trusting my husband would do what he was supposed to and not put me in this position, but apparently he only thought of himself. After I closed my business, I didn't know what I owed whom so I contacted the proper agencies to find out what returns they needed from me. I filed them and they sent the bill. Since there was no way I could come up with that kind of money, they sent a levy notice around tax time which prompted me to expedite my filing of BK which was partially for the Automatic Stay and also partly to eliminate the other bill collectors which were hounding me so that I could deal with the taxes only.

Since they sent me a levy notice, I called the 800 number and spoke with a rep. from the IRS that told me my file was being forwarded to an RO for collections. It was an automatic thing for me, I guess because I owed more than $50k and couldn't possibly pay it. I was able to call the 800 number to track it until it reached the desk of the RO in my area.

From everything I've read, most people say that the last thing you want is to have your file forwarded to an RO, but I've talked to her at least twice and she was really informative and a very nice lady. I know the objective of her job is to collect for the IRS, but at least she's pleasant to deal with and much more personable than being at the mercy of the Automated Collection Service, which stinks.

[HHM]

SouthernBelle how did you get set up with an RO? I was just beginning negotiations with the ACS last week. My CPA will be helping me with the OIC. Do you suggest that maybe I contact the IRS and ask for a local RO in my area (my Attorney told me last week not to contact anyone at the IRS that they would take it from here).

HHM not meaning to skirt tail SouthernBelle but I have similar tax issues except mine are my payroll taxes from the sell of stocks. About 50k 1 time in 2006 it was due to the company I work for that backdated stock options. This is why I am filing BK because I will never have this money again because my broker Lehmans sold it to pay a margin call.
Thanks for any advise.

Thanks SouthernBelle for sharing your situation.

RO's are assigned based on a fairly complex computer program, so you cannot simply request one. Look at it this way, right now there are 800,000 delinquent tax accounts waiting to be assigned to an RO. (in que so to speak). Getting an RO is a crap shoot, sometimes its a good thing, sometimes not depending on who you get. In SB's situation, it is easier to get informal agreements (i.e. give me two months to get an OIC submitted without levying me) done when an RO is involved. When your case is with ACS, levies etc happen automaticall by computer.

[scubaman]

Thanks HHM/SountherBelle, for your infomation I guess then I am taking the correct action to deal with all this financial mess. I will just wait and see what happens w/my
Attny a day at a time.

[CindyLou]

If you are an asset case, then wouldn't your assets go FIRST to pay the IRS before anyone else gets a cent?