IRS Installment Agreements And The Best Options For You
Payment agreements, payment plans and payment options are other names for IRS installment agreements. If you have back taxes, an installment agreement might be the solution for your IRS debt. If approved, the IRS will not take any collection action against you or your property. By negotiating an installment agreement with the IRS, you can settle your back taxes by making monthly payments. However, the penalties and interest will continue to accrue during the installment agreement period.
Most taxpayers, who owe back taxes and can’t afford to pay the amount owed, usually need to set up an installment agreement plan with the Internal Service Revenue. The IRS is interested in collecting money from taxpayers and is willing to consent to a reasonable payment plan.
How To Qualify For An Installment Agreement
In order to be eligible for a payment plan for your tax debt, the IRS wants to see that you filed all your past tax returns.
Another condition is to make your payments established within the installment agreement in a timely manner. The IRS has the right to revoke the installment agreement, if you don’t make your payments in time. It is recommended to have your payment contribution made before the due date to avoid any banking delays or money transfer errors.
Terms of the installment agreement requires that self-employees to be current on their quarterly estimated tax payments for the current year. Employers must be current on payroll tax deposits and form 941 filings to qualify for a payment plan.
Negotiate An Installment Agreement With The IRS
Setting up an installment agreement with the IRS and making monthly payments will reduce your tax liability.
If you owe $25,000 or less, you may be able to set up a low dollar installment agreement (not requiring a manager’s approval) by requesting it and providing the information necessary to prove your income, assets and your expenses.
However, it is important to know how to negotiate your payment plan if you are looking to reduce your tax debt. A tax advisor can help you lower your monthly payments, and make sure you don’t break the agreement, causing a levy.
If you owe more than $25,000, you will probably need a tax representative for your installment agreement negotiations’ with the IRS. Your tax advisor can help you set up an installment agreement. Even more, after analyzing your financial situation, a good tax negotiator can propose an affordable payment plan for your convenience. The IRS representatives will review your Collection Information Statement on Form 433-A or Form 433-F and they will make a determination as to whether accept or reject your proposal.
