IRS Installment Agreement  

Financial problems are a main concern for many Americans.  These stressors cause problems with loved ones, friends, employers, people you don’t know in general, etc. If you owe back taxes to the IRS, this can really begin to wear on a person.  There is constant worry about when someone will show at your door, or if a Sheriff is going to serve you with a warrant if you don’t pay your tax debt.  Yes, the last is extreme, but it can happen if you don’t start to get your arms wrapped around your IRS debt.  Yes, it’s debt because you owe someone, in this case the IRS, which is not someone you want to owe. 

For many Americans, an Installment Agreement is a great way to come to an agreement with the IRS.  In some cases, a taxpayer can avoid a tax lien and in 99% of the cases you can avoid or stop a levy to your bank or wages.  In all cases, this will help to ease the stress as you will no longer need to worry about the IRS as you have made an agreement to pay them back!

We do suggest contacting a tax resolution specialist to speak with someone who can give you some information on these agreements outlined below.  In some cases, an Installment Agreement may not be the right path for your specific case and it is best to find out before calling the IRS and working through you financial information with an IRS Agent.

How Do I Request an IRS Installment Agreement?

As always, the most ideal and best way to eliminate your tax debt it to pay in full.  This is due to the accrual of penalties and interest.  Depending on when you filed your return, you could be hit with both the failure to file and failure to pay penalty, along with interest, which is continually accruing until the debt is paid in full.

If you are unable to pay your tax debt in full, then an Installment Agreement may be the right choice for you, and all depends on your current financial situation.  Before requesting such an agreement, you should know your total income and your necessary expenses to ensure you are able to afford a monthly payment consistently month after month.  It’s not a good idea to default an agreement nor continually calling back to adjust your monthly payment amount.

There are really three ways to obtain an Installment Agreement depending on the amount you owe.  There is an online option, over the phone and by mail submitting the proper forms.

We are here to help

Call us at 800-829-7483

Which IRS Installment Agreement is Right for Me?

If you and/or your tax resolution specialist decide an Installment Agreement is best for your tax situation, there are several options to choose from, again, all depending on the amount you owe and your current financial condition.

By hiring Legacy Tax Resolution Services, we will complete a financial analysis by reviewing current income and expenses and to determine your monthly disposable income amount.  In some cases, it is best to hire a professional as they are experienced in know what debts or expenses the IRS will allow and which expenses would be disallowed.  As always, it is best to know what you can afford monthly versus the IRS telling you what you can afford.

With any agreement, you will need to submit a proposal to the IRS requesting to pay X amount every month.  This amount must pay your debt in full within 36, 60, 72 or 84 months and before your Collection Statute End Dates run out.  If the IRS agrees with your proposal, you will be protected from any enforced collection action, such as bank levies or wage garnishments, and in some cases a Federal Tax Lien.

Before we list the agreements available, there are the same rules for each agreement that must be followed to continue to keep this agreement intact. Failure to do so will default the agreement causing you to start over.  As a note, the IRS will only allow you to default three times.

            Basic Criteria

1. You must be in compliance before requesting an agreement.  This means all tax returns have been filed, maybe not paid, but filed.  In addition, you must be up to date on Estimated Tax Payments if this is a requirement for you, or Federal Tax Deposits if you are a business.

2. Once on an agreement, you must file all future tax returns timely and must pay any new balances due in full. 

3. Once in an agreement, penalties and interest will continue to accrue until the balances due have been paid in full.

4. You must make your required monthly payments on time each month.  We suggest making your due date the 28^th of the month as this gives you the whole month to ensure the right amount of funds are available.

Here are the current IRS Installment Agreements available:

• Guaranteed Installment Agreements
  For many, this agreement is the easiest agreement to obtain as it’s designed for taxpayers who owe $10,000 or less including penalties and interest. This agreement allows you to pay at the very minimum $25 per month if that amount would pay your tax debt in full in 36 months.  For example, you owe $9,250 / 36 = $257 per month. With this option you do not need to provide any financial information. This agreement also avoids a Federal Tax Lien from being filed, which can help with credit purchases in the future.  Be sure you meet the basic criteria and you are eligible for this agreement, hence the name Guaranteed.

• Streamlined Installment Agreements
  The IRS Fresh Start Initiative has allowed the Streamlined Installment Agreement to increase the amount of debt owed from $25,000 to $50,000. This agreement allows you to pay your total debt in full over 72 months if this is your first Installment Agreement or 60 months if you have been on an Installment Agreement previously. With this option you do not need to provide any financial information.  With this option there are two parts when it comes to the filing of a Federal Tax Lien.  If a tax lien has already been filed and you owe $25,000 or less, you should enter into a Direct Debit agreement where the IRS deducts your monthly payment from your bank account.  Once you have made three successful payments, you can then make a request to the IRS asking that they withdrawal the federal tax lien.  If you owe more than $25,000, you will need to pay down your balance due with penalties and interest to $25,000 or less.  Now, if a tax lien has not yet been filed, you should also enter into a Direct Debit agreement.  This will avoid any additional tax liens from being filed, as long as this agreement stays intact.  Again, make sure you meet the basic criteria before making this request.

• Expanded Streamlined Installment Agreements

This agreement is like the Streamlined, except it allows taxpayers with a balance due of $100,000 to pay the total debt over 84 months.  Again, with this option you do not need to provide any financial information.  The key here is how old is the tax debt as you will need to make sure your monthly payment will the earliest balances before the Collection Statute End Dates run out.  This agreement also requires that you enter into a Direct Debit, which is great also if tax liens have not yet been filed.

• Partial Payment Installment Agreements
  If in the end you do not qualify for any of the agreements mentioned above, you will need to enter into an agreement based upon your current financial condition.  This means you will need to complete a Form 433-F with your income information and list your necessary expenses.  In addition, you will need to document the proof of these financial items, such as providing the documentation necessary to the IRS for their review to ensure your form is accurate.  This will include last three months of paystubs, bank statements, mortgage or rent statement, proof of vehicle payment and/or expenses, healthcare expenses, etc.  The IRS will review, send over the managerial review and a letter will be sent in 7-10 days informing if your proposal has been accepted or denied.  If denied, the reason for denial will be listed and typically what amount they are requesting you pay each month.

In some cases, you are able to request an Installment Agreement online.  To do this visit https://www.irs.gov/payments/online-payment-agreement-application If the system states you are ineligible, you have two options. 1. Call the IRS directly at 1-800-829-1040 for Individuals or 1-800-829-4933 for Business.  You may then request the Installment Agreement over the phone and will then be able to fax in your forms 433-D, 433-F, 9465.  2. You may send your request in writing to the address listed on your most recent notice.  If you choose to mail, these requests are taking longer due to less staff in the office and cases being handled on a first in first out basis.

We are here to help

Call us at 800-829-7483

Follow the Guidelines of Your IRS Installment Agreement

Once your Installment Agreement is accepted, be sure to review the acceptance letter you receive.  This will again inform you of the fees associated with entering into an agreement and what your responsibilities are going forward.  You need to make sure you continue to remain in compliance as any hiccup could cause your agreement to default.  You would then need to start all over and all your hard work setting it up in the first place would be for nothing.

Lastly, if you are at all concerned about setting up an agreement or not sure you should be answering the question the IRS is asking, it’s okay to say, I will need to review that information and call back. May I have a week to do so.  The IRS should oblige.  At that point, call a tax resolution specialist…right away for some advice and guidance.  As the old saying goes, it’s better to be safe than sorry.  When it comes to the IRS, there isn’t an erase button so it’s best to be sure you know the answer to the question rather than guess.

Use Legacy Tax & Resolution Services for an Installment Plan

Our initial consultation is free and here we will talk about your case, your concerns and what you hope for in the end.  We are here to listen and will not take your case if we feel you can go it alone, but we’ll be sure you have the knowledge needed.

Once you become a client, we will initiate contact with the IRS and State.  We will follow-up on your case and find out how far along in the process you are currently.  Has your case been assigned to a Revenue Agent or Officer? Are you in Collections and quick action must be taken to ensure a levy would not be placed?

Once we have the information needed, we will then complete a financial analysis of your current financial situation.  We will present you with the information we have found and work together on what resolution options are available for your specific case.  Sometimes it may not be exactly what you are hoping for, like not paying anything at all, but it will be a final resolution that will resolve your tax debt and give you a better night sleep without having to worry if you will have money in your bank account tomorrow.

Once you are in a resolution, we are always available to help with questions, where to make payments, due dates, etc.  Once you become a client, we stay with you to the very end of your case.

Call us today for a free consultation. 800-829-7483.  We look forward to helping you!