IRS Installment Agreement and Payment Plans

If you’ve fallen behind on filing or paying your taxes, there can be severe consequences including bank levies, wage garnishment, tax liens filed against your property, lower credit scores, and the possible loss of your job for certain professionals and government employees.  In addition, you will be pursued relentlessly by the IRS and state tax authorities through their collection efforts and activities. 

Fortunately, there is a way out of this living nightmare by setting up an IRS installment agreement payment plan with the assistance of the tax professionals at ASAP Tax Relief.  Call or contact us now at 1-855-375-5400 and one of our tax professionals will provide you a free, no-pressure, consultation.  (We don’t have salesmen, just trained tax professionals eager to help you.)  Or, keep reading and we’ll give you an overview of the process and main options to consider.

Caution: If you have defaulted on a previously established IRS installment agreement, you may need special help reestablishing a new agreement with the IRS.  Please click here for more information or call us.

 

IRS Installment Agreement Overview

There are three main steps to set up an IRS installment agreement, each with its own special considerations.

Step 1:  Before you can establish an IRS installment agreement:  First, file all your past tax returns

Even if you don’t have the money to pay all your past taxes at this time, it is still important that you complete and file all your prior-year returns.    We cannot establish your total tax liability and determine your available options until all your returns have been filed.   ASAP Tax Relief professionals can prepare your prior-year returns or amended returns.

If you don’t file your returns, the IRS will eventually create a Substitute Return for you; however, it will likely overstate the tax you actually owe due to the assumptions the IRS makes when preparing this Substitute Return.  So it is always in your best interest to file your return with your information.  And finally, the IRS will not enter into negotiations or work with you to establish an installment agreement or any kind of resolution settlement or payment plan until all you prior-year returns have been filed.

Step 2:  Finding the Right IRS Installment Agreement Plan for You

There are several different IRS installment agreement plans available and discussed below.  Your ASAP Tax Relief  professional will advise you about the options and plans that are right for you based on your financial situation, profession, age, marital status, and other life factors. We’ll make the calls, fill out the paperwork and tailor a solution to your needs and work with the tax authorities to get the right installment agreement plan set up for you. 

Regular IRS Installment Agreement Payment Plans

There are several flavors of the regular installment agreement program depending on the amount you owe, what you can afford to pay back on a monthly basis and how much information you want to disclose to the IRS. 

If you owe less than $50,000 and can afford to pay this back over six years, with interest and penalties, you may qualify for a payment plan without full financial disclosure and supporting documents.   However, many taxpayers cannot afford this streamlined approach and therefore must submit financial statements along with supporting documentation to prove their case.  Taxpayers must substantiate their total monthly income and expenses, disclose all available assets (both physical and financial), list any equity in property and answer quite a few questions concerning themselves and their spouse’s financial affairs. This information is used to analyze what property or assets may be available to pay the tax debt.

Tiered IRS Installment Agreement Plans

In some cases you may qualify for a graduated payment plan where a lower amount is paid in the first 12 months which then increases to a higher monthly amount for the remainder of the plan. Usually the IRS will need a substantiated reason and documentation to allow for this.

Partial Payment IRS Installment Agreement Plans

These plans are for taxpayers who cannot afford to pay their full tax debt before the IRS statute of limitations expires.  Because the IRS is agreeing to accept less than the full amount of the tax debt to be repaid, these are the most stringent, complex, and lengthy plans to get approved.   Taxpayers must make a full financial disclosure with supporting documentation.  The expiration of the statute of limitations on the tax debt is a factor that must be weighed in arriving at the total payment of back taxes.  This can be a lengthy and complicated process, but it is the right choice for some people.

State Tax Installment Agreement Payment Plans

Each state has its own rules, regulations, and payment plan requirements.  Some states closely follow the federal approach, outlined above, but others have additional special rules and qualifications.   Your Tax Specialist will advise you of any special state tax requirements.

Step 3:  Implementing the Chosen IRS Installment Agreement Plan

After considering your personal situation and financial resources, your ASAP Tax Relief professional  will advise you on the best plan type and monthly payment amount to satisfy the IRS or state tax authorities.  As you can see there is wide variety of IRS installment agreement options.  The tax professionals at ASAP Tax Relief will make sure you understand the tradeoffs and get the best outcome for you. Based on your feedback, we will prepare the necessary forms and schedules and negotiate the proposed plan with the federal and state tax authorities on your behalf.

Here’s how ASAP Tax Relief can help you:

  • Prepare your prior-year tax returns or amend prior-year returns if necessary
  • Explain the various  IRS installment agreement plans and options available to you
  • Prepare all the supporting material for submission to the IRS or state tax authority
  • Present and negotiate the payment plan details with IRS and state tax officials.

The IRS installment agreement option is a great way for many people to affordably pay-off their past tax debt and get the IRS off their backs, but it may not be the best solution for you.

To find out if an IRS installment agreement plan is right for you, fill-out our free Consultation Form or call us at 1-855-375-5400 to speak with a tax professional.  We can take the worry out of this process for you and make it easy for you to establish the right IRS installment agreement for you.


 Call Now for a Free Confidential Consultation

 1-855-375-5400.