A 71-year-old retired home health worker who had not filed income tax returns for six years recently hired Omni. The IRS had just notified him that they were starting to file Substitute for Returns on his unpaid taxes, and he was concerned that he wouldn’t be able to pay back his tax debt on his limited income.
After Omni reviewed the man’s finances, they found that he had 100% equity in his home, substantial available credit and a savings account with enough cash to completely pay off the liability. The client, however, did not want to borrow against his home because he did not think he could afford the monthly payments. He also did not want to use his savings to pay the taxes, since he was using that money as a supplement for his Social Security – his sole source of income. He had a number of health concerns, including prostate cancer and a full knee replacement, and he didn’t think he’d be able to cover his health costs without money in his savings account.
Once the IRS filed all of the man’s missing returns, Omni requested that he be placed in Currently Non-Collectible status due to his age, limited income and health problems. The IRS, however, not only denied the request, but they also issued a Final Notice of Intent to Levy.
Omni immediately filed an appeal. The Appeals Officer, like the IRS, initially requested that the client fully pay his tax debt through either a home equity loan or the liquidation of his savings account. The client was approved for a home equity loan, but he was concerned that he wouldn’t be able to afford a new monthly payment.
Omni went back to the Appeals Officer and argued that the client could not afford the monthly payments on the loan. And even though the client could have fully paid the taxes by emptying his savings, Omni argued that he needed those funds to ensure he could pay all his bills and have a good quality of life despite his health concerns.
After two weeks of negotiations, the Appeals Officer approved the client for a Partial Pay Installment Agreement for $50 a month, allowing him to keep his savings (over $25,000) and all equity in his home. He will pay approximately $6,000 on his $25,000 liability.