Tax resolution roadmap · 2025–2027

Pay down.
Agree. Sell. Close.

Phebe Jensch — federal and Virginia. Where things stand, what we're doing about it, and what we need from you.

Prepared September 2026 for Richard Morris. Figures are estimates until the returns are locked.

Where this stands

The plan in the spring was to pay the 2025 taxes down from the Wisconsin land sale. That sale didn't happen, so the 2025 balances — federal and Virginia — are still owed, and interest and penalties are still accruing on them.

The end goal: sell the Virginia house

The Alexandria house is what clears everything. One closing pays the 2025 federal balance, the 2026 federal balance, Virginia, the HELOC, and the mortgage. Every debt paid down from that one sale. We list in January and aim to close in spring or early summer.

Between now and then: two things we will not do

Everything before closing is about paying the balances down far enough, right now, that neither of these is ever on the table:

No financial disclosure

Get federal 2025 under $250,000 so that if we go on a payment plan, it's done without a financial statement.

No bank levy

Pay Virginia in full, and have the federal agreement in place — once it's pending, a levy is off the table.

Federal 2025 · at October filing
~$278K
→ under $250K in October
~$260K base per your spring estimate; a payment of about $45K lands it near $233K.
Virginia 2025 · accrued
~$50K
→ paid in full
~$45K base, $50–52K with accruals. Possibly before Nov 1.
Federal 2026 · due Apr 15, 2027
~$100K
→ paid at closing
Illustrative. Your reconciliation of 2026 distributions and withholding sets the real number.
The goals, in order

  1. Get federal 2025 under $250,000

    File by Oct 15 with a payment of about $45K designated to 2025. Assessed balance lands near $233K. This is what keeps a payment plan free of any financial statement.

    OCT 2026

  2. Pay Virginia 2025 in full

    The entire Virginia balance, around $50K. Handled on its own, separate from federal. Both of these first two may be done before November 1.

    BY NOV 1

  3. Possibly go on a federal payment plan

    Most likely, not confirmed. With the balance under $250K: a non-simple installment agreement through campus collection, no financial statement (IRM 5.19.1.6.4), direct debit of about $3,500/mo. Once the request is pending, levy is off the table (§6331(k)). A lien determination is expected; it's paid at closing. No prepayment penalty.

    NOV 2026

  4. List the Virginia house

    January listing, spring or early-summer close. Goal: under contract before the 2026 return is due April 15, so 2026 is paid from proceeds rather than carried.

    JAN 2027

  5. Close — everything paid

    Proceeds clear the 2025 agreement, 2026, Virginia if anything remains, the HELOC, and the mortgage. No open agreements, no open balances.

    SPRING '27
At filing Federal 2025 at Oct 15 filing: ~$278K accrued $278K After payment After ~$45K designated to 2025: ~$233K $233K $250K — the line 0 100K 200K
Federal 2025, before and after the October payment. Estimated until your locked figures replace them.
Timeline
  • SEP2026
    Where we areBoth 2025 balances open and accruing.
  • OCT 15
    Federal return filed, ~$45K paid to 2025Federal drops under $250K.
  • NOV 1
    Virginia return filed and paid in fullVirginia closed out.
  • NOV
    Federal payment plan requested (likely)Pending request: no levy possible.
  • JAN2027
    Virginia house listed
  • APR 15
    2026 return due, ~$100KSeparate from the 2025 agreement. Aim: house under contract by now.
  • SPRING2027
    Closing2025, 2026, Virginia, HELOC, mortgage — all paid from proceeds.
What we need from you
  1. Lock the 2025 federal and Virginia figures, and confirm whether the ~$260K includes the estimated-tax penalty (~$1,931) or it sits on top.
  2. After the October payment posts, pull the 2025 account transcript and confirm the assessed balance is under $250,000.
  3. Confirm the non-simple installment agreement with no financial statement is still current practice, and whether you'd file Form 9465 or speak directly with ACS.
  4. Reconcile 2026 IRA distributions and withholding to set the 2026 number.
  5. Confirm the §121 exclusion through the revocable trust and the half step-up in basis on the house (already on your list).