Patricia and Michael, a married couple in Houston, owed $42,000 in federal taxes for 2021 and 2022 after Michael’s employer failed to withhold enough federal income tax and Patricia withdrew funds from her retirement account to cover medical expenses. They had been paying what they could — about $200 per month — but it wasn’t enough to satisfy the IRS. They received a CP504 notice threatening to levy their bank accounts and wages.
The couple contacted Global Gate Tax Relief after receiving the notice. Our team immediately contacted the IRS to place a hold on collection while we set up a proper resolution. Since their total balance was under $50,000, they qualified for a streamlined installment agreement with no financial disclosure required.
We calculated their CSED dates and determined they needed to pay approximately $650 per month to satisfy the balance within the 72-month window. However, we first applied for First-Time Penalty Abatement, which reduced their balance by $6,200 in failure-to-file and failure-to-pay penalties. This brought their balance to approximately $35,800 and lowered their monthly payment to $500.
We set up a Direct Debit Installment Agreement (DDIA) through the IRS Online Payment Agreement portal, qualifying for the lowest user fee. We also requested withdrawal of the federal tax lien that had been filed, which was approved under the Fresh Start Program since their balance was under $25,000 at the time of the direct debit agreement. Total monthly payment: $500. Total resolution timeline: 72 months. Penalty savings: $6,200.