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The IRS Installment Agreement
Can't Pay Your Taxes?
Don't Stress, We Can Help!
A huge tax liability bill can be stressful and many times totally unexpected.
If you currently owe a tax liability debt that you cannot pay in full, we can help determine if you may qualify for various options including exploring options for either a streamlined or non-streamlined installment agreement with the IRS. As Tax Experts, we evaluate your eligibility for the options and help you determine the best alternative that meets your needs and the alternative that will gain approval of the Internal Revenue Service. Since Tax Controversy Resolution makes up over 80% of our services, we are experts in these procedural processes and our knowledge will help get you and your family on-track with resolution.
Other “life” circumstances may be causing you to suffer a financial hardship with a true inability to pay your tax liability debt. Whether the financial hardship is temporary or manifests more long term for you, we are experts in Tax Controversy Resolution with the knowledge and expertise to help you navigate your options, determine the best solution and represent your case in Collections procedurally seeking the most advantageous settlement in the interest of your Taxpayer Rights and the interest of the Government in the collection of tax liabilities.
Understanding the basics of how an Installment Agreement can help you!
When taxpayers are in compliance with all tax laws and filings requirements, the Internal Revenue Service has alternative options available that allow taxpayers to pay off their tax liability debts Installment Agreement. In essence, this is a loan you take from the U.S. Government to satisfy payment of your tax liability debt over a period of time. In addition to the amount of the tax liability debt penalties applicable to the assessment and accruing interest will apply. Sometimes interest and penalties can equal 8% to 10% per year. Therefore, it’s always recommended to pay-off an Installment Agreement as quickly as possible.
The IRS has four different types of Installment Agreements: guaranteed, streamlined, partial payment, and non-streamlined.
Each Installment type requires an application filing fee payable to the IRS unless the taxpayer qualifies for a financial hardship fee waiver.
Taxpayers may restructure or reinstate a previous Installment Agreement that has been rendered in default under specific allowable facts and circumstances. A separate fee payable to the IRS is required.
Guaranteed Installment Agreement
To qualify for a Guaranteed Installment Agreement with the IRS, the taxpayer must meet the following conditions:
- Taxpayer owes less than $50,000.00 tax liability debt (not including interest and penalties);
- In the previous five years, the taxpayer has filed all required tax returns, paid taxes owed, and has not entered into a prior installment agreement;
- The taxpayer is unable to pay the tax liability when due or within 120 days after the due date;
- The tax liability debt will be paid off in full including interest and penalties within 36 months;
and
- The taxpayer must pay at least the minimum monthly payment which is calculated as the tax liability debt plus interest plus penalties divided by 30.
Under this payment plan, the IRS will not file a federal tax lien against the taxpayer for the amount of the outstanding tax liability debt.
Streamlined Installment Agreement
In most cases, a taxpayer that qualifies for a Guaranteed Agreement will also qualify for the Streamlined Installment Agreement. A streamlined installment agreement has the following requirements:
- Taxpayer owes a tax liability debt, interest, and penalties that do not exceed $50,000.00;
- The full balance of the tax liability debt can be paid off within 72 months;
and
- The proposed monthly payment amount is equal to or greater than the "minimum acceptable payment" which is determined to be the greater of the minimum acceptable payment of $25 or the minimum payment amount as calculated by the IRS to be the tax liability debt plus interest plus penalties divided by 50.
Under this payment plan, the IRS will not file a federal tax lien against the taxpayer for the amount of the outstanding tax liability debt.
Partial Payment Installment Agreement Or Compromise Agreements
A Partial Payment Installment Agreement permits the IRS to enter into Compromise Agreements with taxpayers for the partial payment of their tax liability debts. These provisions have strict qualifications rules and complex procedural requirements, but can often relieve either a portion or even a significant amount of the taxpayer’s tax liability debt. We specialize in resolving these tax controversy case types when the taxpayer can demonstrate either a temporary or long-term financial hardship through an in-depth review and analysis of the taxpayer’s current and future financial position.
Upon submission of proper documentation, the IRS will review a variety of the taxpayer’s information relating to the taxpayer’s income sources, debts, living expenses, assets owned, accounts balances to name just a few and verify the taxpayer’s financial statement information to render a determination on the extent of the taxpayer’s financial hardship. Then a determination is made on the extent of the taxpayer’s financial hardship and a determination is made on the eligibility for the tax liability debt to be compromised in the interests of the Taxpayer’s Rights and in the interests of the Government’s necessity to collect tax debts.
In these circumstances, if the taxpayer has certain types of assets that can be sold to pay at least a portion of the tax liability debt, the IRS may require additional information to be provided relating to those assets and may require implementation of arrangements for the sale of those assets.
Other circumstances that could impair acceptance of a proposed Partial Payment Installment Agreement if the IRS considers some of the taxpayer's living expenses to be unnecessary or above a reasonable amount. In these circumstances, a taxpayer may be required to make living or spending adjustments that would afford them more disposable income to satisfy their tax liability debts.
These agreement types or a currently not collectible status require a financial review of the taxpayer’s financial hardship condition every two years. Depending upon the determination decision of the bi-annual review, either a decrease or increase in the taxpayer’s monthly installment payments may be warranted. In some circumstances, a termination of the agreement may instead be warranted.
Non-Streamlined Installment Agreement Or Compromise Agreements
When a taxpayer owes $50,000.00 or more in tax liability debt, interest and penalties and can routinely and consistently make monthly payments to the IRS in satisfaction of the tax debt, then a Non-Streamlined Agreement is a viable option.
These are more complex plans requiring negotiated settlement with the IRS to achieve acceptance of the taxpayer’s proposed installment agreement payment amount. These provisions similarly have strict qualifications rules and complex procedural requirements, but can often relieve either a portion or even a significant amount of the taxpayer’s tax liability debt. We specialize in resolving these tax controversy case types when the taxpayer can demonstrate long-term financial hardship through an in-depth review and analysis of the taxpayer’s current and future financial position.
Similarly, upon submission of proper documentation, the IRS will review a variety of the taxpayer’s information about income sources, debts, living expenses, assets owned, accounts balances to name just a few and verify the taxpayer’s financial statement information to render a determination on the extent of the taxpayer’s financial hardship and a determination on the extent of the tax liability debt to be compromised in the interests of the Taxpayer’s Rights and in the interests of the Government’s necessity to collect tax debts.
Also in similarity, when a taxpayer has certain types of assets that can be sold to pay at least a portion of the tax liability debt, the IRS may require additional information to be provided relating to those assets and may require implementation of arrangements for the sale of those assets to facilitate payment then will render a determination relating to the remaining tax liability debt, interest and penalties.
Similarly also a determination that some of the taxpayers living expenses are unnecessary or above reasonable amounts, the IRS may require living or spending adjustments that would afford the taxpayer more disposable income to satisfy their tax liability debts.
Our Tax Expert’s knowledge and experience in analyzing, navigating and negotiating these settlements is unsurpassed in the industry. We help you achieve life changes that will help you now and in the future.
Various Ways to Make Installment Agreement Payments!
Taxpayers can make IRS Installment Agreement monthly payments using a variety of methods:
- Payroll deductions;
- Direct debits from a checking or savings account;
- Mailed Checks or Money Orders;
- Electronic Federal Tax Payment System (EFTPS) checking or savings account debits;
- Credit cards payments;
- Online Payments Agreement (OPA);
When Will the IRS Revoke an Installment Agreement?
The IRS has the ability to revoke an Installment Agreement under many different circumstances, here are a few of the most common circumstances that will provoke revocation:
- The taxpayer misses a scheduled payment;
- The taxpayer does not file a tax return or pay taxes for a subsequent tax year after an Installment Agreement is entered into relating to a prior year tax liability debt;
- The taxpayer provided inaccurate information on a financial statement submitted to instate the Installment Agreement;
or
- The taxpayer is making monthly payments under an approved Partial Payment Installment Agreement and a review indicates a change in the taxpayer’s financial position.
