June 15, 2020

How Do I Set Up an Installment Agreement- IRS Just Sent Me Form 433 D.

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How Do I Set Up an Installment Agreement- IRS Just Sent Me Form 433 D.

The IRS goes through a series of notices regarding Installment Agreements, from Cold (barely on the radar) to Smoldering Hot (requires immediate attention). Check out the links to learn more:

Form 9465 Installment Agreement Request - Not too scary (Cold).
Form 433D – Installment Agreement- Direct Debit Payment Authorization- Still pretty cool (Getting warmer).
Letter 2273C- Installment Agreement Acceptance. Warm, this is a good thing
CP 89- Annual Installment Agreement Statement – Statement of payments made. Good, this means your Installment Agreement is in good standing
Letter 2272C- Installment Agreement Cannot Be Considered. Smoldering hot—act now or lose your due process rights (your right to a hearing, reinstatement of the Installment Agreement and to stop collections)
CP 522- We’re Reviewing Your Installment Agreement- Smoldering hot- This likely means that the IRS believes that your monthly payment should increase. You absolutely must respond.
CP 523 – Intent to Terminate Your Installment Agreement and Seize (Levy) Your Assets- Red hot- The IRS will terminate you Installment Agreement unless you do something- act now or lose your due process rights (your right to a hearing, reinstatement of the Installment Agreement and to stop collections)

Form 433 D (Form 433d, Form 433-d) Installment Agreement Request. Generally, the IRS sends this form to formally request an Installment Agreement after a Form 9465 has been submitted. It is the second notice/form in the Installment Agreement series.

What can I expect because of this notice?

Form 433 D is the application for an Installment Agreement, in particular a Direct Debt Installment Agreement. It is more difficult to complete than the Form 9465 and accuracy is extremely important. Below is a checklist, to help you accurately complete the form:

You likely already have the form, but just in case, you can download a copy of the form.
Next, fill out the top section. It asks for your name, address, Social Security Number or Employee Identification Number, and your phone number.
Next, fill out the box asking what kinds of taxes you are trying to obtain the installment agreement for.
1. Be sure to include the form numbers corresponding to the relevant tax forms (i.e. 1040).
2. Important: Indicate all tax period(s) for which you owe.
After that, you’ll indicate the amount you wish to pay initially, and the amount you’ll pay each subsequent month. Below this is a section to indicate increasing or decreasing amount and when.
1. In this section, you can indicate if there is a date in the future when you wish to increase or decrease your monthly payment, plus the amount of that change.
Initial Required: Be sure to read through the agreement information on the back side of the form. You are REQUIRED to initial that you have read the terms to the Installment Agreement. This means you understand the entire Form 433 D. Note the statement next to Additional Conditions, where the IRS tells you they may contact third parties in order to process and maintain this agreement.
1. This note means the IRS may both now and in the future contact employers and other financial institutions to determine and verify your income. The IRS will be monitoring you tax returns for increases in income.
In the DIRECT DEBIT section, you can include the account number and routing number of the checking account from which the IRS will withdraw its allotted payments, if you intend to pay by this method.
1. You can also attach a voided check if you prefer, but NOT a deposit slip.
2. If you choose not to use this method of payment but can, it is IMPORTANT that you check the box next to “I am unable to make debt payments”
You can also choose not to pay by debit, and instead mail the IRS a check each month.
1. The IRS will send you vouchers to mail with your payments..
2. When paying by check
  1. 1. Write your social security or employer identification number on each payment.
    2. Make your check or money order payable to “United States Treasury.”
    3. Make each payment in an amount at least equal to the amount specified in this agreement.
    4. Don’t double one payment and skip the next without contacting the IRS first.
    5. Enclose a copy of the reminder notice, if you receive one, with each payment using the envelope provided.
    6. Write the type of tax by form number and “Installment Agreement” in the memo section of the check (i.e. 1040 Installment Agreement)
Lastly, you must sign and date the form.
1. If this is a joint liability, both taxpayer and spouse must sign
2. If this is for an entity, only an officer of the company can sign and MUST include the title.
3. Make sure to mark the date, otherwise it will not be valid.

What can I expect next after this notice?

If the IRS accepts your Installment Agreement you receive IRS Letter 2273C- Installment Agreement Acceptance. If the IRS rejects your Installment Agreement, they will send you IRS Letter 2272C- Installment Agreement Cannot Be Accepted.

If you receive Letter 2272C, the IRS will detail the reason(s) they cannot accept your Installment Agreement.

What are my options?

What is my first step?

If you received a letter or notice, a decision must be made. Do you feel confident to handle this situation on your own? If it is a simple issue and you already know the answer, call, or write them. If the issue is more complicated, you need to hire a Certified Tax Resolution Specialist. The IRS or State will take full advantage of your lack of knowledge and experience.

What is Your Next Step?

The next step is to determine if the notice was sent in error. Do you have an outstanding tax liability? Do you have unfiled or incomplete returns?

Is There a Time Limit?

Yes! Each letter or notice from the IRS or State will indicate a date that you MUST contact them by. If you need more time, call the number on the notice or letter, and request an extension. DO NOT ALLOW the time to expire without contacting them or hiring a representative to contact them for you.

What You Don’t Want to Do!

What you don’t want to do is nothing. Your tax problems will only get worse if you ignore them. If you cannot pay, there are a number of potential solutions available to those who are otherwise in compliance. In compliance means having all tax returns filed and any balances paid or on a payment plan. If you have outstanding debts or unfiled returns, you need to get hire a Certified Tax Resolution Specialist.

Get Some Help

If you don’t know how to address the issue(s), have unfiled returns/unpaid balances or just don’t feel confident, let the experts at Legacy Tax & Resolution Services represent you. Work with our team of Certified Tax Resolution Specialists to resolve your issue(s) quickly. Best of all, you don’t have to talk to the IRS or State; we can speak on your behalf.

Stop the stress and resolve your problems Call 800-829-7483 TODAY