IRS is no Help with Avoiding Fees

Usually the 16-year-old behind the counter at your favorite fast food establishment isn’t trying to up-sell you and get you to order the more expensive burger on the menu. They don’t care; they’re getting paid by the hour. In fact, they will often go out of their way to help you if there is a cheaper way to order what you want. Well, according to the latest TIGTA report, the 16-year-old at the burger joint may be better with customer service, in some respects, than the IRS.

The latest TIGTA report delves into the Streamlined Installment Agreement (SIA) program. The IRS is not being consistent in their approach to SIAs and are failing in three key areas. One of the failures that TIGTA identified was that IRS representatives are not apprising taxpayers of a less expensive alternative: the “extension to pay.”

It costs $150 to set up an installment agreement — this is a non-refundable user fee. But if the balance is low enough to be paid off in 120 days or less, then an installment agreement is not necessary.  If the balance can be paid in 120 days, the IRS will normally agree to an “extension to pay” and the taxpayer can avoid the $150 fee. If an IRS representative knows that the balance can be paid off in 120 days, then the representative should steer the taxpayer towards the extension to pay rather than the SIA, or at least notify them of the option. As part of their audit, TIGTA found over $1 million in fees that could have been avoided by the extension to pay alternative.

Unfortunately the old adage, “They don’t care; they’re getting paid by the hour” correctly describes some IRS reps too.

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