IRS Installment Agreement

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IRS Installment Agreements-Types, Fees and Process.

An IRS installment plan is a beneficial choice for those individuals who owe money to the IRS and are unable to pay the entire balance in full, but have a regular income and/or assets to be capable of paying the amount over a certain period of time. Installment agreements (or IA), is a highly popular method a majority of individuals use to arrange payment of back taxes they owe to the IRS. For many individuals, while filing out their current taxes, they send an installment agreement form along with the requested tax return because they already know that they are not going to be able to afford the total amount owed in one lump sum. When the amount of taxes owed to the IRS is under the amount of twenty-five thousand dollars, it is easy to get an installment agreement. However, amounts over this make it more difficult to obtain this kind of agreement. If the IRS has already placed a levy on you, an installment agreement will get it released. However, you should always inquire about other options for repayment other than an installment agreement, such as uncollectible status, penalty abatement, and offer in compromise.

IRS Installment Agreements Types

Installment agreements come in different forms depending on the financial situation of the individual. Each agreement, however, enables you to pay back the IRS by using a system of monthly payments. Listed below are some of the most common installment agreements frequently used by the IRS.

Guaranteed installment agreement – a guaranteed agreement is the easiest to obtain and is reserved for individuals who owe the IRS less than ten-thousand dollars in back taxes.

Streamlined installment agreement – this agreement is for individuals who have tax debt ranging between eleven-thousand and twenty-five thousand dollars. It is called “streamlined” because full financial disclosure is not necessitated.

Financially verified installment agreement –if you are in debt of more than twenty-five thousand dollars in back taxes and are not able to provide minimum monthly payments associated with a streamlined installment agreement, this is the next best installment agreement to request for. You are required to complete Form 433 which will verify your current financial situation. The IRS provides a tax official for this installment agreement to assist you in the process.

Installment agreement over 100 K – longer payment terms are often required for installment agreements if you owe more than one hundred thousand dollars in back taxes. More than likely, to satisfy a portion of your current debt and get an installment agreement, the IRS will necessitate that you sell some of your current assets.

Partial payment installment agreement – When your current financial situation warrants that you are completely incapable of paying past taxes, you might be eligible for Part-Pay Installment Agreement. It necessitates that you pay only a portion of the full amount over a period of time .  However, this form of an installment agreement is rarely used because it requires complete financial disclosure.

Fees and Process for Common IRS Installment Agreements

In your first monthly payment to one of the most common installment agreements, such as the Streamlines of Guaranteed agreements, you will be required to pay a single fee. This fee includes:
  • $52 for a direct debit new installment agreement payment.
  • $105 for a non-direct debit new installment agreement payment (this is often taken from a credit card or payroll deduction, or you can pay it using an online payment method, by check or money order) – this form of payment is not advocated because of possible bank levies.
  • $45 for reinstatement or restructure of an installment agreement that already existed previously

The IRS usually has a thirty-day window to either deny or accept your application for an installment agreement. If you meet the basic requirements, then the IRS is required to accept your request. To know the prerequisites for each installment agreement and to find out if it is an appropriate choice for you, visit their specific page and get more information.

If you miss a payment, the IRS is able to stop the installment agreement immediately. This also holds true if you do not disclose the requested financial records to the IRS, if you are delinquent in making payments on other IRS taxes due, or if the IRS receives information that you provided incorrect information to obtain an installment agreement.

To prevent the discontinuation of an installment agreement due to a financial condition change that has made you unable to afford the next payment, speak with someone from the IRS as soon as possible. If you miss a payment and do not notify the IRS on the reason why this was done they will put a tax lien on assets you own, or a tax levy on personal bank accounts or paycheck.

If you want to get the greatest possible outcome when attempting to negotiate an installment agreement from the IRS, do not hesitate to give us a call at 1-800-717-2797.

You can get a free IRS tax analysis to see if you are eligible for an installment agreement.

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