The situation
Walter, a fixed-income retiree in Nevada, owed about $90,000. With only Social Security and a small pension, there was no realistic way to pay the full balance before the 10-year collection statute expired. He did not qualify for a settlement outright, but a standard payment plan would have demanded more than he had.
What we did
- We mapped his Collection Statute Expiration Dates to see how much time the IRS actually had left to collect.
- We documented his fixed income against allowable living expenses to establish a small affordable payment.
- We negotiated a Partial Payment Installment Agreement (PPIA) — a type of installment agreement where the balance left when the statute expires is never collected.
- We set realistic expectations for the periodic financial reviews that come with a PPIA.
The outcome
Walter now pays a small monthly amount he can comfortably afford. Because of his limited collection potential and the approaching statute dates, he is on track to repay only a fraction of the $90,000 — the rest will expire uncollected. It is effectively a settlement spread over time.
The statute is your friend here
The IRS generally has 10 years to collect. A PPIA lets you pay what you can until that clock runs out, after which the remaining balance is written off.
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About these stories
Illustrative client scenarios based on common case types. Individual results vary. These scenarios are composites drawn from common case types we handle at US Certified Tax Services; they are not specific named clients and are provided for illustration only. Outcomes depend on your individual facts and IRS determinations. For a review of your situation, request a free consultation.