I owed 4 years worth of unfiled back taxes. Worked out a deal with IRS in mid 2015 to pay $255 /monthly for 5 years (more below, need help)?

They told me that the monthly payment would be $255 for 60 months ($15,300 total with fees she said) to pay it off, but if I paid more during that time it would pay off sooner. I set up a monthly debit from my bank account to automatically withdraw $255. I paid $375 that first month.

From November 2015 to June

They told me that the monthly payment would be $255 for 60 months ($15,300 total with fees she said) to pay it off, but if I paid more during that time it would pay off sooner. I set up a monthly debit from my bank account to automatically withdraw $255. I paid $375 that first month.

From November 2015 to June 2016 I paid double payments for a total of $510 a month for those 8 months. For the tax year of 2015 I also had an excess $1116.47 after doing my taxes as a refund which was automatically applied to that balance. So from August 2015 to March 2017 I have paid my monthly payments of $255, one month of $310, 8 extra payments of $255, and a tax refund of $1116.47. That total comes to $8376.47.

Now I'm not nuanced enough to figure out how much this would reduce the balance per extra payment to calculate how this would reduce the time left to pay. So just doing standard math and taking in the entire 5 year balance I assumed somewhere around $7000 left remaining (plus I have a refund of $1040 coming this year to apply to my balance as well) so I was feeling pretty good.

Well I just called for the first time and did the hour wait on hold to get an exact balance left and after finally getting through the lady tells me to pay the balance off today would be $11490. She's sending me my transcripts, but even at $255 a month that leaves 40 months to complete the 5 years. 40 months is only $10,200. I have a complete online banking paper trail, but any ideas how to proceed please?

Best Answer:

unsure: Just wait until you get the transcripts and compare those to your online banking records. Something may not have posted yet or may not have been correctly credited to your balance. If you have been paying on this for 20 months, the amount they're saying is owed is roughly what it would be if you had only paid the $255 minimum payment that whole time, correct? The extra payments may not have been correctly applied.

There definitely seems to be some money missing, but don't count your chickens yet, because there could have been interest or other fees you weren't warned about. Get that transcript from the IRS and go over it with a fine tooth comb. If you see any discrepancies it would be worth your time to deal with that hold time again and talk to someone about it, or take it to your local IRS office to sit down with someone and review it.

Other answer:

unsure:
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Kathy S:
My math doesn't agree with your math. I agree with the poster who said to wait for the transcript. I don't know if you're being charged interest on your unpaid balance, but that would cause your balance to stay big. And he's right, they would talk to you and explain it all to you.
Fred:
Yeah, Get a lawyer !

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