If you’re struggling to pay your tax debts in full, IRS installment agreements offer a viable solution. Let attorney Robert Schaller walk you through the ins and outs of installment agreements, explaining how they work, who qualifies, and providing practical tips to secure an agreement that fits your financial situation.
Understanding IRS Installment Agreements
What is an IRS installment agreement? An IRS installment agreement is a formal payment plan that allows taxpayers to pay their tax debts in monthly installments rather than in a lump sum. It provides a structured approach for individuals and businesses to fulfill their tax obligations while managing their cash flow effectively.
Benefits of IRS Installment Agreements
- Flexibility: Installment agreements provide flexibility by allowing you to make monthly payments over an extended period, reducing the financial burden.
- Avoiding Collection Actions: By entering into an installment agreement, you can prevent aggressive collection actions, such as wage garnishment or bank levies.
- Continued Compliance: Fulfilling your tax obligations through an installment agreement demonstrates your commitment to compliance and can help rebuild your financial standing.
Eligibility Criteria for IRS Installment Agreements
To qualify for the more common IRS installment agreement, you must:
- Be current with your tax return filings.
- Owe less than $50,000 in combined tax, penalties, and interest.
- Demonstrate the ability to make consistent monthly payments.
Securing an IRS Installment Agreement
Attorney Robert Schaller helps secure an IRS installment agreement by:
- Assessing Your Financial Situation: Evaluate your income, expenses, and assets to determine the maximum monthly payment you can afford.
- Choosing the Right Installment Agreement Type: The IRS offers various installment agreement options, including streamlined agreements, partial payment agreements, and non-streamlined agreements. Understand which one suits your circumstances best.
- Submitting an Installment Agreement Request: File Form 9465, Installment Agreement Request, or use the IRS’s Online Payment Agreement (OPA) tool to initiate the process. Provide accurate financial information and propose a reasonable monthly payment amount.
- Communicating with the IRS: Be prepared to negotiate and communicate with the IRS regarding your installment agreement. Promptly respond to any requests for additional information.
IRS installment agreements offer a structured and manageable approach to resolve tax debts for individuals and businesses. By understanding the benefits, meeting the eligibility criteria, and following the necessary steps, you can secure an installment agreement that allows you to pay off your tax debts while regaining financial stability. Take control of your tax situation today with an IRS installment agreement.