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If a taxpayer is unable to pay his/her tax liability in full there are other options, such as Installment Agreements. There are different types of Installment Agreements, depending on amounts owed and levels of non-compliance with IRS rules.
We will never file an Installment Agreement with the IRS that our clients cannot live with, our proprietary process will always identify the lowest legally possible payment to the IRS and the best plan that the IRS must accept.
A taxpayer’s request for an installment agreement will be denied if all required tax returns have not been filed.
Any refund due to a taxpayer in a future year will be applied against the amount owed.
If a taxpayer’s refund is applied to his/her balance, he/she is still required to make the regular monthly installment payment until the debt has been satisfied in full or the “Collection Status Expiration Date” (a 10-year period starting when the tax return has been filed) has expired.
A taxpayer is eligible for a guaranteed installment agreement if the tax owed is not more than $10,000 and meets the following criteria:
Streamlined installment agreements work best for taxpayers who owe the IRS up to $50,000 and who cannot pay off their tax debt in a lump sum. The IRS does not require a comprehensive financial statement (IRS Form 433f – Collection Information Statement). However, a few conditions apply:
When a taxpayer is not able to pay the owed tax debt in full we can negotiate an Installment Agreement based on what the IRS calls “Disposable Income” which is the difference between net earnings minus “Allowable Living Expenses”. Our proprietary process determines if a taxpayer qualifies for this plan and if so what the legally lowest monthly payment that the IRS must accept will be.
Taxpayers who are being considered for a Partial Pay Installment Agreement must provide complete and accurate financial information that will be reviewed and verified. Additionally, taxpayers with Partial Pay Installment Agreements will be subject to a subsequent financial review every two years. As a result of this review, the amount of the installment payments could increase or the agreement could be terminated, if the taxpayer’s financial condition improves.
The Partial Pay Installment Agreement payment option provides an appropriate payment option for many taxpayers.
There are two options for making payments once your Installment Agreement is approved:
Future refunds will be applied to the tax debt until it is paid in full. Regular monthly payments must still be made according to the agreed payment schedule.