RB is an older, divorced wage earner that accumulated around $95,000 in back taxes after paying former spouse with accumulated retirement funds pursuant to settlement agreement. RB is in agreement with the amounts owed and has remaining retirement funds approximating $115,000 that the IRS would have otherwise taken in settlement of his tax debt. Furthermore, RB would be assessed additional taxes on the release of these retirement funds to pay his debt of around $27,000. The taxpayer’s goal is simply to keep as much of his retirement funds as possible, for as long as possible and pay the IRS only a minimal amount.

We were able to get the IRS to stop all collection activities and abstain from collecting its debt from the proceeds it would have otherwise received from these retirement funds. The taxpayer entered into an installment agreement to pay around $300 per month for the next several years at which time the taxpayer’s ability to pay would be reassessed. The taxpayer currently earns more than the payment amount in dividends and interest on the retirement funds. When the taxpayer reaches retirement age, he will be able to demonstrate that the retirement funds are only enough to meet living expenses and is expected to either remain uncollectible or settle his tax debt for a nominal amount. Total professional fees approximated $12,000 and were paid from retirement account balances that would otherwise have been levied.