INSTALLMENT AGREEMENTS (Payment Plans)
What are Installment Agreements?
Installment Agreements may be the best option if you can't pay the full amount of taxes owed the IRS (or OTC) or if you don't qualify for an Offer in Compromise. They prefer taxpayers pay what they owe sooner and all at once, but for many, this is not an option. An Installment Agreement allows you to pay your outstanding taxes in smaller, more manageable payments.
There are several types of Installment Agreements depending upon how much you owe and your collectability. If you call to make arrangements on your own, they will try to collect as much from you as quickly as they can without giving you the full range of options available. We will analyze your collectability based on financial information you provide and negotiate an Installment Agreement on your behalf based on your ability to make monthly payments. Rules to qualify for an Installment Agreement and the amount you will be required to pay can be extremely complicated. Call our office, we understand exactly what to do on your behalf.
How Installment Agreements Work
CAUTION: The IRS may file a "Notice of Federal Tax Lien" against you, though they
cannot seize your property or your wages while an Installment Agreement Request is pending, in effect, or for 30 days after it has been rejected. Depending upon the amount owed, the IRS may also require a personal financial statement. If you own a business, a business financial statement may be required too. Our office will start the procedure to initiate the Installment Agreement.
- You must disclose all assets and all liabiliies. The assets must include all cash and bank accounts, as well as any future expected income.
- The IRS considers your ability to pay before determining your monthly payment amount.
- Once you start paying your monthly Installment Agreement, it continues until the outstanding tax debt is paid in full. Like a credit card or bank loan, the quicker you pay it off means the less interest and/or penalities you pay in the long run. Paying extra each month will lower the total amount paid.
Important Considerations
- Installment Agreements require equal monthly payments.
- The maximum length for an Installment Agreement is Five (5) years (60 months).
- Interest and penalties will continue to accrue during the Installment Agreement payment plan.
- To be granted an Installment Agreement, you can't have cash in checking, savings, money market, or brokerage accounts that would be adequate to pay the full tax debt.
Tax attorney Sherri Carver has the knowledge and the experience necessary to assist you with Installment Agreements. Dealing with tax problems can be one of the most stressful times of anyone's life;
Don't handle it alone! You need a tax attorney who understands tax law and how to help you end your tax problems.
Contact Our Office today for a consultation regarding your tax problems!
