September 1, 2020
IRS Payment Online | IRS Pay Online | Pay IRS Online
IRS Payment Online | IRS Pay Online | Pay IRS Online
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!
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.
Am I Eligible for This Agreement Type?
Before we go through the IRS Online Payment Agreement available, there are the same rules 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 28th of the month as this gives you the whole month to ensure the right amount of funds are available.
For an online Installment Agreement, you must owe $50,000 or less including penalties and interest. 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.
IRS Installment Agreement Fee
If you apply for an agreement online at www.IRS.gov
Direct Debit Option $31
Other method of payment $149
If you request a payroll deduction agreement using Form 2159, user fee is $225
If you are low income, you could qualify for a reduced user fee of $43. The IRS will not “offer” you this option, so you must complete Form 13844 to request a reduced fee.
These fees will be deducted from your first payment and are only due one time for each agreement. If your first payment is less than the user fee, your first payment must be at least that amount.
IRS Online Payment Agreement Types
There are two types of Online Payment Agreement options: Short-Term and Long-Term. Here we will list each and the parameters for each option. Keep in mind, you must meet the basic criteria by remaining in full compliance.
Short-Term Payment Plan
This payment plan is for taxpayers who owe $100,000 or less and gives the option to pay your tax bill in full in 120 days or less. There is no set-up fee. As with any balance due with the IRS, penalties and interest continue to accrue until the balance due is paid in full.
- How Do I Send in IRS Monthly Payments?
Once you are approved for the Short-Term payment plan, you should pay your balance due in full within 120 days from your checking or savings account. If you choose to pay by debit card or credit card, there are fees associated, which can range from 1.5% to 3% depending on the processor and which card you use. www.irs.gov/payments
- What Happens If I Can’t Make a Payment?
There are cases where the IRS could cancel your Installment Agreement once already in place. As you both made an agreement, there are certain terms you agreed to when you requested a payment arrangement. Not following those guidelines could cause the IRS to cancel the agreement. Here are the three main reasons this could happen:
- Did You Miss a Payment?
Did you forget to make a payment? Or, were you on a Direct Debit and forgot to have the funds available in your account? If so, the IRS does allow 30 days for you to correct this mistake. After 30 days, the IRS will send you a CP523, Notice to Default Agreement, which gives you another 30 days to correct the mistake. However, the sooner you can ensure a payment is in the system, the better!
- Did You Forget to File and/or Pay Your Taxes Once on This Agreement?
You agreed to remain in compliance, meaning filing and paying your taxes on time. The IRS will continue to watch your case and failure to file and pay will cause your agreement to go into default.
It’s important not to default your agreement. Once in default, you are sent back to collections, which leaves you open to additional liens to be filed and levies to be issued to your wages or bank account. If you know you are going to miss a payment, contact the IRS right away to make arrangements to correct the problem. 1-800-829-1040
Long-Term Payment Plan
This payment plan is for taxpayers who owe $50,000 or less and gives the option to pay your tax bill in full in 60 months or less, as long as it will pay your balance due in full before the Collection Statute End Dates run out. If your balance due is over $25,000, you must be on a Direct Debit Agreement. There is a $31 set-up fee for direct debit. If you owe $25,000 or less, you have the option to make manual payments each month or set up as a Direct Debit. If you choose to make payments manually, there is a $149 set up fee. As with any balance due with the IRS, penalties and interest continue to accrue until the balance due is paid in full.
- How Do I Send in IRS Monthly Payments?
Once you are approved for the Long-Term Payment Plan, and you choose to make manual payments each month, you could pay from your checking or savings account. If you choose to pay by debit card or credit card, there are fees associated, which can range from 1.5% to 3% depending on the processor and which card you use. www.irs.gov/payments
- What Happens If I Can’t Make a Payment?
There are cases where the IRS could cancel your Installment Agreement once already in place. As you both made an agreement, there are certain terms you agreed to when you requested a payment arrangement. Not following those guidelines could cause the IRS to cancel the agreement. Here are the three main reasons this could happen:
- Did You Miss a Payment?
Did you forget to make a payment? Or, were you on a Direct Debit and forgot to have the funds available in your account? If so, the IRS does allow 30 days for you to correct this mistake. After 30 days, the IRS will send you a CP523, Notice to Default Agreement, which gives you another 30 days to correct the mistake. However, the sooner you can ensure a payment is in the system, the better!
- Did You Forget to File and/or Pay Your Taxes Once on This Agreement?
You agreed to remain in compliance, meaning filing and paying your taxes on time. The IRS will continue to watch your case and failure to file and pay will cause your agreement to go into default.
It’s important not to default your agreement. Once in default, you are sent back to collections, which leaves you open to additional liens to be filed and levies to be issued to your wages or bank account. If you know you are going to miss a payment, contact the IRS right away to make arrangements to correct the problem. 1-800-829-1040
If I am in an IRS Online Payment Agreement, Will I Receive My Refund?
If you have a balance due with the IRS, any future refunds will be applied to the balances due until the tax account is $0.
How Will Legacy Tax & Resolution Services Help Me with an IRS Online Payment Agreement?
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!
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