The 120 Day Extension to Pay

Key Takeaways

The next method for resolving IRS liability is the 120-day Extension to Pay.
The IRS particularly if the client has a wonderful compliance history will grant an automatic 120-day Extension to Pay.
You can get this simply by calling ACS or writing in.

The next method for resolving IRS liability is the 120-day Extension to Pay. The IRS particularly if the client has a wonderful compliance history will grant an automatic 120-day Extension to Pay. You can get this simply by calling ACS or writing in. We recommend you call ACS in saying, “My client intends to pay fully. But we need a little bit of time. Can we get 120 days?” Generally, if you don’t ask for 120 days then we won’t give you 120 days. So, make sure you say, “I want a 120 days.” Again, when you’re dealing with ACS agents, a lot of times they are not being most taxpayer-friendly. You want to make sure you ask for your 120 days. However, what the IRS doesn’t tell you is even though a 120-day Extension is granted for you automatically, there may be ways to buy your client a little bit more time. For example, if you call ACS and you say, “My client is going to pay you but we need 30 days to pay it off. Can you give me a 30-day collection hold?” The IRS will say, “Great.

That will give a 30-day collection hold.” And the day on the 30th day, you should go, “You know, IRS, we really like another 30 days.” The IRS agent, depending on how they feel, will say, “Okay, we’ll give you another 30 days.” At the end of 30 days, then you can call the IRS and say, “Hey, we’re going to be ready to pay in full. We just need a 120 days to do it.” The IRS says, “Okay. I’ll give you your 120-day extension.” So, you can only use the 120-day extension once but by adding collection holds before you actually triggered the 120-day extension you may be able to buy your client more time to pay the IRS off. Now, keep in mind during this period of extending collections, interests and penalties will continue to accrue. But, at least you are avoiding the threat of any collection action or any levies which is really, really important. Keep that in mind that things are highly negotiable within that 120-day window.

Have a Tax Question or Notice?

If you’re dealing with an IRS audit, collection action, California state tax matter, or any other tax issue, we can review your situation in a free 15-minute call.

Schedule a Free Call → Or call: (619) 378-3138

California EDD Audit Penalties

EDD payroll tax penalties stack in layers. The base assessment includes unpaid UI, SDI, ETT, and PIT withholding across up to 12 quarters , then CUIC §1126 adds 15% for late filing, §1127 adds another 15% for negligence, and §1128 can add 50% for fraud — before Labor Code §226.8’s per-worker civil penalties even apply.

What Are Reasonable Goals in an IRS Criminal Investigation?

The US attorney the US attorney has a 90 percent conviction rate in criminal tax cases it's important to understand.

IRS Offer in Compromise: What to Do When They Are Rejected – Part Two

Successful offer in compromises begin at the preparation level by putting together a package that is well-organized and gives the service every opportunity to accept your offer in compromise.