Resolved: $1.5 Million Liability for Medical Staffing Company Published February 20, 2023
Tax Guard successfully resolved an IRS liability of $1.5 million through an installment agreement of $2,700 per month for a medical staffing company. As a result, the business was able to continue funding with Light Star Financial Services (Light Star). The business’s main source of revenue is the state’s Medicaid program. When the state shifted from a primary care case management system to a managed care organization, it reduced the reimbursement rate. The change in reimbursement hurt cash flow and caused the business to fall behind with the IRS. Prior to Tax Guard’s involvement, the IRS revenue officer insisted on monthly payments of $25,000, which the business verbally agreed to despite the fact it could not afford the payments. However, Tax Guard secured an agreement with terms the business could afford.
Tax Guard Associate, successfully:
- Prevented the IRS from levying bank accounts and accounts receivable,
- Negotiated an installment agreement with a monthly payment of $2,700 based on the business’s ability to pay,
- Renewed the terms of the installment agreement when it came up for periodic review by the IRS, and
- Obtained a subordination of federal tax lien to protect Light Star and preserve the funding relationship.
The payment of $2,700 per month constitutes a partial payment installment agreement (PPIA), which the IRS acknowledges “will not fully satisfy the liability” and puts the business in a position to repay approximately $325,000 over the statute of limitations for collection (approximately ten years),
“We tried to resolve the issue on our own, but our revenue officer didn’t give us any options. He told us we had to make payments of $25,000 per month,” said the business owner. “We initially agreed to the payment because we didn’t think we had an alternative. We appreciate Tax Guard explaining to us how the IRS is supposed to work and negotiating a payment we can afford. Thanks to the low monthly payment our business has continued to grow, and when we needed to review the terms of the agreement we managed to keep our monthly payment the same.”
“Tax Guard kept us well-informed of the resolution process and negotiated an amazing agreement for our client,” said Janelle Glidewell, CEO of Light Star. “Most of our portfolio is in the medical industry and works with governmental payers. Our clients are subject to offset [through the federal payment levy program or FPLP] if there is an IRS liability. We trust Tax Guard to navigate the IRS and avoid offset and levy for all our clients with federal tax liabilities.”
