Georgians who have trouble paying their taxes might want to take heed of actor Forest Whitaker's case. The actor sued the IRS because it refused to grant him an installment plan and instead demanded that he pay all of the taxes that he owed in a lump sum payment.
Whitaker earned wages from his company, Salako Inc., in 2013 and 2014. In 2013, he reported $1,491,749 in income on his tax return and a tax bill of $426,812. During that year, his company only withheld $10,579 in taxes, and Whitaker added an additional $4,000 in estimated tax payments. The IRS assessed him $426,812 for his tax liability and sent him a notice of its intent to levy in early 2015.
He then requested a due process hearing and an installment plan. He proposed making monthly payments of $20,000 per month to repay the tax liability. The IRS countered with $20,000 payments for one year and then $40,000 per month for the following years. The IRS said that he would need to file his 2014 tax return, take care of the withholding problems and keep current with his estimated taxes. Whitaker filed his 2014 return, and it showed that he had only had $2,267 withheld from his checks. The IRS turned down his installment request, and he sued. The Tax Court sided with the IRS because Whitaker had not followed through with what he had been told to do.
People who owe substantial sums to the IRS may be able to secure installment agreements. It is important for them to follow through with doing what they are told. They might want to get help from an experienced tax attorney who can negotiate with the IRS on their behalf. A lawyer may be able to secure tax relief for his or her clients.