Friday, March 2, 2012 about 5:00 p.m. we received word from an IRS supervisor that they had accepted our proposal to place a woman in her 60's, a local self-employed therapist, into Status 53 (currently not collectible status). With a levy on the horizon, we were forced to immediately deal with the IRS' Automated Collection Services (ACS). This wing is nasty!

ACS wanted to use our client's gross income, divide it by 12 and put her on an unconscionable 1 year installment plan. By the way, this ain't how it's done. All IRS collection alternatives run off of net income. Most importantly, when our client's allowable expenses were properly subtracted from the gross income, there was $4 per month left over on which she had to live! When challenged, the IRS agent would not budge on his mistake, and threatened to levy.

We appealed the methodology internally several times before a managerial supervisor took over and agreed that the proper protocol in the IRS collection manual is, in fact, to use net income (gross income minus allowable expenses) as the method for determining collectibility. This is the right result. The IRS must refrain from collection against her until her income shows an ability to pay.

Fist bumps, high fives all around at quitting time on a Friday. Man, I love this job!