IRS will accept a payment plan that pays off the initial
amount in 60 months (or less). $290x60=$17,400

Sounds like you were somehow unaware that you owed $17,000
when the plan was set up. Interest will continue to accrue,
but your debt will shrink.

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- quote -

I have ordered one, it should be here in a couple days. I
will have to get my files from storage, but IIRC, it was
stated to me when I set up the plan that the $10,000 (Round
figure, it was just slightly more than that) was the total
owed including penalties, etc. For the years in question I
was single and earning in the range of 40,000 per year. I
earned almost 70 last year and owed 1000, I can't imagine
that much more on 3 years of much less income.

Thanks for your input.

John

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suited.jacks[at]gmail.com wrote:

- quote -

Since you mention back taxes were a certain figure (10,000),
you didn't include interest and penalties which IRS has
assessed. Get a transcript of your account and you'll see
what was added and when. From now on however, only interest
and failure to pay penalty will be assessed.

ChEAr$,
Harlan Lunsford, EA n LA

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suited.ja...[at]gmail.com wrote:

- quote -

Yes, payment plans that do not reduce the overall liability
are common - but NOT in your case. A $290 per month payment
would pay off a $10,000 liability in a little over three
years. It may be that when you entered into the agreement
the tax was $10,000 but the interest and penalties had not
been applied yet - or perhaps another adjustment was made or
another tax year added. You can order a Transcript of
Account to see what has happened.

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suited.jacks[at]gmail.com wrote:

- quote -

I'd guess that the initial $10,000 was the total tax on late
filed returns, and the $17,000 includes tax, penalty and
interest. It's not the payment plan that caused the amount
to almost double, it's the penalty and interest that accrued
because you didn't file and pay timely. Bankruptcy won't
help you yet. Income Tax debt can't be discharged until it
is well aged. Even then, the tax lien will continue on your
non-exempt assets. Offer In Compromise acceptance is
unlikely on this relatively small amount with ample
collection statute remaining. $290 per month on $17,000
seems fair.

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ------------------------------------------------------- >

I failed to file taxes for a few years, and ended up owing
about $10,000 in back taxes. Early last year, I worked with
the IRS to file and setup a payment plan to take care of
this. The IRS person that I worked with put me on a plan
paying $290 per month, as a direct payment from my bank
account.

I called this morning to find out how much I had remaining
on my debt, and was informed that in a little over a year,
my debt had gone UP from ~10,000 to just over $17,000.

Does that sound right to anyone else? Is this a normal thing
to be put on a payment plan that guarantees your debt will
almost double in a year? Do I have any recourse on this if
it is true?

My alternative is looking at bankruptcy, which I am very
loath to do.

Any help is appreciated.

John

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ------------------------------------------------------- >