An installment agreement allows an individual with tax debt to pay the entire back tax amount in monthly installments over a specified period of time. Taxpayers who are unable to satisfy their entire tax debt at once may find the right installment agreement advantageous.
There are many types of installment agreements to be chosen based on the amount of tax debt owed and the taxpayer’s financial ability. When applying for an installment agreement, taxpayers should consider all eligibility requirements for the plan they’ve selected.
On a tax debt of more than $25,000, a payment plan can be established by negotiating with the IRS. Larger liabilities may take more time to pay and, as such, may require a unique resolution plan with the IRS. At RMS Tax Consulting we have the experience and knowledge to represent you.
Individuals who owe $10,000 or less in tax debt may use the guaranteed installment agreements to pay their back taxes. It allows a taxpayer to pay the debt in fixed installments over 36 months or less.
Those who owe $100,000 or less in tax debt may use a recently announced streamlined installment agreement. Taxpayers that qualify for this more liberal plan can have up to 7 years to pay with no financial statements required.
Installment agreements may also include tax debt reduction if a taxpayer is not able to pay the entire amount. The IRS may allow a taxpayer to pay a lower monthly amount until their financial situation improves or the debt expires. Note that in cases such as these, the IRS may place a lien on the taxpayer.
The experienced professionals at RMS Tax Consulting know all your options. We can help you select which installment agreement is right for you. Call Enrolled Agent Richard Schickel today at 520-668-3243 for your free 15 minute case review.