Installment Agreement

The Internal Revenue Service has several new features added to the interactive Online Payment Agreement application found on the IRS website. These features are designed to make it easier for taxpayers to make changes to existing installment agreements and apply for a new one. The system now permits individuals to revise their payment due dates and/or amounts on existing agreements, to revise existing extensions to regular installment agreements, and to revise existing regular installment agreements to a payroll deduction installment agreement or a direct debit installment agreement.

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Taxpayers who owe but can't pay in full have several options available to help them meet their tax obligations and save money by the April 15 filing deadline. First, taxpayers should file their return on time and pay as much as they can with their return. Second, a taxpayer should request a installment payment agreement for the balance. Interest and penalties can add up for taxpayers that don't file and pay on time. Taxpayers can limit these charges by simply filing on time and paying at least some of the balance owed. Interest and penalties will apply to any tax paid after the April 15 deadline, but are based on the balance owed, therefore paying some and owing less will reduce the interest and penalties associated with not paying in full. Additionally, just by filing on time (even if a balance is owed) a taxpayer avoids the much larger 5-percent-per-month late-filing penalty.

More on Payment Options for Taxpayers Who Can’t Pay in Full

I prepared this short video on IRS Payment Plans also known as IRS Installment Agreements. I explain in detail how do you qualify and how do you get the IRS to agree to one. It's sometimes very easy and at times excruciatingly difficult. If you want to know more about the different solutions available to people with IRS Problems, you might want to visit our IRS Solutions page or call our office tollfree at (888) 438-6474. We represent clients all across the U.S. and the world.

More on IRS Payment Plans – Do you qualify? and How do you get one?

If you need IRS help to determine if an IRS installment payment plan is the best choice for your IRS problem, contact our office and our friendly and professional staff will be happy to assist you in making that decision.

An installment payment plan is used extensively as an option for repaying IRS debt.  As long as you owe $25,000 or less, you are likely to be able to utilize a 60-month repayment plan.  If, however, you owe more than $25,000 to the IRS, typically you will need to negotiate for an installment plan and what they payment will need to be to satisfy the IRS.

If you have an IRS problem and you owe a substantial amount of money, utilizing an installment plan option can be convenient and affordable.  In some circumstances, an installment plan may be the only option available to you.  However, you need to realize there are also some drawbacks to an installment plan.  Drawbacks include the fact that you will still continue to accrue interest and penalties on the amount you owe, even while you are making payments.  When you combine the interest rate with the penalties assessed, the accrual rate can be 8 to 10 percent per year.  It is possible to make payments for several years and still owe more money than the original amount.  You will need IRS help to find the best solution and repayment method that is going to work for you.  Call our office to learn more and get assistance for your IRS problems.

You may not be eligible for an installment plan.  To be eligible, the IRS documentation must show that you have filed all past due tax returns.  If you are self-employed, the IRS must show your status as current on your quarterly estimated tax payments.  Also, if you have employees, you must be up-to-date on your payroll tax deposits and Form 941 submittals according to IRS records.

The best option would be, of course, to pay any amount you owe in full as quickly as possible.  You will avoid interest charges and minimize penalties by paying the total amount you owe in full.  However, that is not always possible and, therefore, an installment plan can help you through your current situation.  Contact our professional staff for IRS help with your decision-making process before entering into an installment agreement.  It is possible that another type of loan or even using a credit card, if it has a lower interest rate attached to it, can save you money instead of using the IRS installment agreement.  To bring the most benefit to you, you need to pay as much of the amount owed as possible before entering into an installment agreement with the IRS.

If you need IRS Help, contact our office today to determine the most effective way to solve your IRS problems.

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