Understanding IRS Payment Plans
What Is An IRS Installment Agreement?
If you can’t afford to pay your tax debt in full, the IRS may allow you to set up monthly payments. The IRS calls this payment plan an “Installment Agreement.” Despite still having penalties and interest accruing, offering the IRS a payment plan is a very attractive solution to tax debt. It can help get you back on a track, eventually becoming completely free of your tax debt.
How Long Does an Installment Agreement Usually Last?
In general, a standard IRS installment agreement will have you making payments until either (1) the tax debt is paid in full or (2) the time period for collecting your tax debt expires. In certain cases, a Tax Attorney can negotiate a “partial installment agreement” that lets you make minimal payments until the collections period expires, at which time the remaining balance is forgiven.
How Little Can I Pay Per Month?
Your monthly payment will depend on your financial condition. The IRS generally wants you to pay as much as you can possibly afford, which means that your financial condition must be carefully presented to the IRS in order to get the lowest payment possible. Fortunately, the IRS has a streamlined installment agreement program that makes it easier than ever to have an affordable payment.
Why should I Set Up An Installment Agreement?
The most significant benefit of establishing an IRS installment agreement is that the IRS will cease taking any other collections actions against you. No more calls. No more threatening letters. This means that they’ll you’ll be safe from wage garnishments and bank account levies as long as you continue to make the required monthly payment. The flexibility to only pay what you can afford can help you get on your feet and come up with other ways to pay off your tax debt more quickly.
Do I Even Qualify For An Installment Agreement?
Probably. Most taxpayers will qualify for some kind of installment agreement, though the terms can vary wildly from payments over a few months to a few years. However, we can’t be sure until we perform our own analysis of your financial condition. Schedule a free consultation and we’ll help you figure out the best options for dealing with your tax debt once and for all.