My wife and I owe about $15,500 in 1040 taxes from years 2005-2015. We didn't file from 2010-2014. We had a total of about $6,200 in refunds due in 2010, 2011, 2012 and 2014 and believed whatever refunds we had coming would offset some of what we owed when we eventually did file. I had talked to the IRS in 2011 to set up a payment plan for 2005-2009 and then never followed through. They sent us letters for about 6 months and then we stopped hearing from them. My daughter is wanting to apply for financial aid so a few weeks ago I called and spoke to an IRS rep and she told me the time to claim our refund for 2010 and 2011 ($5,700) had expired. She instructed me to file 2012-2015 and that I needed to include a check for everything we owe (2005-present) or a 9465 for the years that we owe. (I also filed 2010 and 2011 just so they are on the record.) Using the amounts from the 433f instructions, I ended up with a $28 monthly deficit before my tax payment. Not thinking it would ever get accepted, I put that I could pay $50 a month on the 9465. A few days ago I got a notice that they approved the $50/mo agreement but it's only for tax years 2005-2009. 2013 and 2015 ($2,750) are not included in the agreement even though I put 2005-2015 on the 9465.

A couple days after I got the notice of approval on my $50/mo payment plan I got another notice that a $12,200 tax lien has been filed for tax years 2005-2009 (the same years covered by the payment plan). The notice says it's for 'personal property' and doesn't say anything specifically about bank accounts or wage garnishment. I don't recall ever getting a notice of intent to file a tax lien. If we did, it certainly hasn't been within the last couple of years.

I have several questions:
1. Since the payment plan is not what I asked for in terms of the years I wanted included, can I reject it or appeal it?

2. Because I have a $78 monthly deficit with the payment agreement, can I petition for "uncollectible" status even though I have already said I could pay $50/mo?

3. Why was a lien issued at the same time a payment plan was approved?

4. Is there any point in appealing the lien? Is this approach ever successful?

5. If I start making the payments, can I still submit an OIC? What's the lowest percentage they will consider? The letters I'm getting from lawyers seem to indicate they can get it down to 5 cents on the dollar.

6. Is the 10 year collection statute affected (tolled) by an active payment agreement?

7. Even though the lien notice I have doesn't say anything about bank accounts or wage garnishment, are these things automatically included or is there a separate process they have to follow to garnish wages and attach to bank accounts?

8. Is there any way to negotiate the $5,700 in unclaimed refunds from 2010 and 2011 into any of this?

9. Other than how I got myself into this mess and how to prevent it going forward, are there any other questions I need to be asking or any other rights I have in settling this tax debt?

Also, I don't recall ever getting a notice of intent to file a tax lien. If we did, it certainly hasn't been within the last couple of years.

Anyone care to chime in?

My wife and I owe about $15,500 in 1040 taxes from years 2005-2015. We didn't file from 2010-2014. We had a total of about $6,200 in refunds due in 2010, 2011, 2012 and 2014 and believed whatever refunds we had coming would offset some of what we owed when we eventually did file.=====>Correct

I had talked to the IRS in 2011 to set up a payment plan for 2005-2009 and then never followed through. They sent us letters for about 6 months and then we stopped hearing from them. My daughter is wanting to apply for financial aid so a few weeks ago I called and spoke to an IRS rep and she told me the time to claim our refund for 2010 and 2011 ($5,700) had expired. She instructed me to file 2012-2015 and that I needed to include a check for everything we owe (2005-present) or a 9465 for the years that we owe. (I also filed 2010 and 2011 just so they are on the record.) Using the amounts from the 433f instructions, I ended up with a $28 monthly deficit before my tax payment. Not thinking it would ever get accepted, I put that I could pay $50 a month on the 9465. A few days ago I got a notice that they approved the $50/mo agreement but it's only for tax years 2005-2009. 2013 and 2015 ($2,750) are not included in the agreement even though I put 2005-2015 on the 9465.

A couple days after I got the notice of approval on my $50/mo payment plan I got another notice that a $12,200 tax lien has been filed for tax years 2005-2009 (the same years covered by the payment plan). The notice says it's for 'personal property' and doesn't say anything specifically about bank accounts or wage garnishment. I don't recall ever getting a notice of intent to file a tax lien. If we did, it certainly hasn't been within the last couple of years.

I have several questions:
1. Since the payment plan is not what I asked for in terms of the years I wanted included, can I reject it or appeal it?========>THE payment plans are known as installment agreements. Since
owe $25Kor less? including interest and penalties that have accrued, you have the option of requesting the payment plan on the IRS website or by preparing a Form 9465 and mailing it to the IRS;you could appeal an IRS Installment Agreement because it became a part of the Collection Appeals Program ; Appealing an IRS Installment Agreement (IA) is within your rights as a taxpayer if it is denied or rejected, terminated, or proposed for termination.
2. Because I have a $78 monthly deficit with the payment agreement, can I petition for "uncollectible" status even though I have already said I could pay $50/mo?====>I guess you need to contact them for more accurate info on your issue here; it is up to them, IRS.

3. Why was a lien issued at the same time a payment plan was approved?====> A federal tax lien exists after they sends you a bill that explains how much you owe. in general , the IRS doen not file a federal tax lien if you set up either a guaranteed installment agreement or a streamlined installment agreement requiring that the outstanding balance be $10k or less in the case of guaranteed installment agreements or $25k or less in the case of streamlined installment agreements. If you owe more than $25k, a lien can be prevented if you pay down the balance so that the balance is $25kor less and establishes a streamlined installment agreement. The IRS will remove a federal tax lien if the lien was filed in error, if the outstanding balance is paid in full, if the outstanding balance is otherwise satisfied for example through a successful offer in compromise, or if the lien becomes unenforceable ;for example, because the lien has expired due to the10-year statute of limitations. It is best to take action as soon as possible when a lien is put in place. It is not a good idea to try to wait it out until the statute of limitations expires because most likely you will get a levy placed on you before then and the IRS will seize your assets before the statute of limitations expires

4. Is there any point in appealing the lien? Is this approach ever successful?=======> to appeal you must ask an IRS manager to review your case or request a Collection Due Process hearing with the office of appeals. In order to be considered for an appeal you must request the appeal by the date noted on the notice you received from the IRS. If you appeal the lien and win, the lien will be released.; Once a tax lien is filed the IRS is required to send a notice of the lien to you within 5 days of the lien being filed. In this notice is a request you will be given the option to request a hearing. This request must be made within 30 days after the fifth day of the lien being filed.

5. If I start making the payments, can I still submit an OIC? What's the lowest percentage they will consider? The letters I'm getting from lawyers seem to indicate they can get it down to 5 cents on the dollar.+=====>You need to contact the IRS formore info. An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can't pay your full tax liability, or doing so creates a financial hardship.

6. Is the 10 year collection statute affected (tolled) by an active payment agreement?=====>> The IRS has ten years from the date of a tax assessment to collect a debt from the taxpayer.
The date the collection statute expires is called the Collection Statute Expiration Date , CSED The IRS has incorrectly calculated the CSED on many prior occasions. Consequently, you should never rely solely on an IRS agent?s statement of the CSED.however, the 10-year collection period can end up lasting more than 10 years because it can be suspended for one or more time periods. The time during which the sol is suspended is not counted toward 10-year deadline. For example, the collections period will be suspended during time periods the IRS is legally barred from taking collection action against you. This means that the limitations period is suspended if you file for bankruptcy and the bankruptcy court issues an automatic stay preventing the IRS from taking collection action against you;the suspension lasts for the period of the bankruptcy case plus six months. The period is also suspended while the IRS is considering your request for an installment agreement, offer in compromise. The IRS can also extend the ten-year period by suing you in federal court; however, it rarely does this.
1.

7. Even though the lien notice I have doesn't say anything about bank accounts or wage garnishment, are these things automatically included or is there a separate process they have to follow to garnish wages and attach to bank accounts?====>I think so; IRS wage garnishment is a legal way for the IRS to collect taxes from you without you actually paying them; Once IRS starts sending out federal tax levies, be prepared to have the federal tax lien filed in the area that you live. IRS protects their interest by the filing of a federal tax lien. The only way to get the federal tax lien removed on your back taxes is to pay the tax in full or to have an offer in compromise accepted and paid in full.

8. Is there any way to negotiate the $5,700 in unclaimed refunds from 2010 and 2011 into any of this?====>I donot think so;your refunds for 2010/2011 are gone forever;
3-year window. You have 3years to claim a refund. If you don?t claim your refund within three years, the money becomes property of the U.S. Treasury. For 2011 returns, the window closes on April 15, 2015.


9. Other than how I got myself into this mess and how to prevent it going forward, are there any other questions I need to be asking or any other rights I have in settling this tax debt?===> it's not so easy to get the IRS to settle a tax debt for pennies on the dollar. It does happen, but only in cases where YOUclearly does not have the assets and/or income to pay off the tax debt in a reasonable time. If you have the money to pay the IRS or will likely have it in the future no amount of negotiating will convince the IRS to settle for less than you owe. This is so whether you represent yourself or hire a high-priced law firm;YOU MAY settles YOUR
tax liabilities through one of the IRS programs/filings. The IRS offers settlements toyou that are struggling with tax debts or have valid reasons to abate penalties. The IRS offers several different options for you to settle your taxes owed. The main factor the IRS takes into consideration when determining if you will qualify for a tax settlement is your financial situation. The tax settlement that you qualifies for is dependent upon yourunique financial situation. The IRS prefers individuals to pay their taxes owed in full, but they will make exceptions for certain circumstances.
The IRS will allow you to either negotiate a tax settlement for less than the total amount owed or come to an agreement on another method for the IRS to collect taxes owed over time. For either of these situations you must meet the qualifications of one of the tax settlement programs set forth by the IRS. you will first have to determine which type of tax settlement you would like to apply for and then submit the appropriate forms to the IRS for review before making a decisionyou can either fill out the information oryou can have a designated tax professional make the filing on their behalf. Once a settlement has been reached by both parties, you will be considered good standing with the IRS for the tax year/years that the settlement covered (unless you default or don?t hold up to all the terms of the agreement).

Thank you for that great information.

I called the IRS again today. I was told that even with an installment agreement in place, the IRS can still file a notice of lien. I plan to appeal this decision and will post the outcome.

With regard to the $50 payment, the representative told me that she could process an updated installment agreement request, but based on the info I provided in my 433f, my payment would still be $26/mo and she would have to get substantiation of my claimed amounts. I decided reducing my payment by $24/mo is not enough to go through the hassle all over again and I will just figure some other way to come up with the shortfall every month.

As far as 2013 & 2015 missing from my installment agreement, two different representatives confirmed that they were now included but had not been assessed when they sent out the installment agreement letter which is why they were not stated. I asked for something in writing but she explained that I would have to send in a request for the 'service center' to regenerate the letter. Again, too much hassle and I have the telephone call recorded (legal in my state) so I have some back-up if there is ever a question down the road.

Again, thanks for the great info here.

Good luck and i guess you need to keep contacting the IRS; i beleive that not somany tax pros actuall understand IRS tax lien/appeal programs

If you're talking about the clowns that advertise on TV and send the 'we'll settle your tax debt' letters, I think it's more a case of them just wanting to lighten our wallets. Even for the most incompetent, logic says that it's impossible for them to do this every day for 10 years and still not know what to expect.

A few years ago my father in law called a gal that rhymes with Doni Reutch. Was very reassuring throughout but in the end, between "Doni's" fees and his tax settlement, he ended up paying the same as the IRS was originally demanding.