IRS Installment Agreement

What is an IRS installment agreement?

IRS payment plan options, including Installment Agreements, are one of the key methods you have by law to settle back taxes. Installment Agreements settle your IRS problems by letting you make monthly payments on your tax bill. There is a good deal of work that goes into determining how much those monthly payments should be. That’s where we come in because our experienced attorneys can help you through this maze.

What’s required for installment agreement relief? For one, you must have all your missing tax returns filed before the agreement becomes effective.

The Installment Agreement might be one that pays all of the overdue tax or it may pay only a part of the overdue tax. Frequently, when you attempt to have an Installment Agreement with the IRS, you encounter a conflict of interest. On the one hand, the IRS has an interest in collecting the overdue taxes in full as fast as it can. On the other hand, you certainly want and need an amount that fits your budget. Here is where our IRS Installment Agreement help and experience, provided by a team of tax lawyers, can really help!

The Good News

The good news? When you have an Installment Agreement in place, all IRS collection efforts will stop. Just think, no more of those certified letters of demand, no more bank levies or wage garnishments. The IRS also stops making distressing phone calls. In some circumstances, however, the IRS may file a notice of tax lien on your property to protect itself.

One financial drawback to an Installment Agreement for payroll taxes or income taxes is that penalties and interest will mount on the balance of back taxes while the Installment Agreement is in place.

Once the Installment Agreement is in place, you must keep up with all tax filings, make sure you file your returns on time, and make your payments on time. The Installment Agreement is a great tool when you cannot afford to make a lump-sum payment of the tax due, and may not qualify for alternative resolution options such as an Offer in Compromise. 

Types of Installment Agreements

There are multiple types of installment agreements with different requirements and repayment windows, depending on how much tax you owe and how soon you can pay it back. The options and requirements change frequently, so it is best to contact our team to see if you qualify for an installment agreement or other tax debt resolution options.

FAQ

Q: Is there a cost to set up an Installment Agreement?

A: If you expect to be able to pay what you owe within 120 days, there is not a setup fee for your Installment Agreement. For longer-term plans with automatic monthly payments from your checking or savings account, there is a $31 setup fee. If you choose to pay manually rather than through direct debit, there is a $149 setup fee. In all cases, interest will continue to accrue until your balance is paid in full.

Q: What information do I need to apply for an Installment Agreement? 

A: Your name and address (as listed on your most recent tax filing), filing status, date of birth, Social Security, or Tax Identification Number. You may need the balance owed, based on the type of agreement requested. You will also be asked to confirm your identity. 

Q: What happens if I can no longer meet the terms of my Installment Agreement? 

A: If you can no longer make the payments to which you agreed, you may be able to work with the IRS to modify the terms of the original Installment Agreement. Gordon Law Group can help if you’re in this situation.

Contact us today to see how an Installment Agreement may work for you.