IRS Payment Plan
If you’re financially unable to pay your tax debt immediately, you may be able to enter into an IRS Payment Plan through an installment agreement request. Before applying for any IRS payment plan or payment agreement, you must be current with the filing of your required tax returns.
If you owe $100,000 or less, you should be able to get an installment payment plan with no formal approval process beyond making the requisite request on Form 9465 or online at the IRS website. The threshold for qualifying for an installment agreement without having to provide financial information was increased from $50,000 to the current $100,000 amount and the timeline for paying is a maximum of 72 months.
If you owe more than $100,000, you will have to negotiate with the IRS to obtain an IRS payment plan. The process begins by completing the Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals . The IRS collector will review your completed collection information statement to determine your ability to pay. It is important to keep in mind that the IRS collection employee’s objective is to collect your tax liability as quickly as possible.
The IRS has statutory authority to enter into an installment agreement that enables you, the taxpayer, to pay your tax liability over a period of time if by doing so will help facilitate the collection of the tax debt. Payment amounts are at the discretion of the IRS. So, if you deal with eight different collectors, you might end up with eight different IRS payment plans. Thus, when negotiating an IRS payment plan when you owe more than $100,000, it is best to work with an experienced tax representative, such as Tax Samaritan, to increase your chances of a favorable outcome.
As your tax representative, our effort will be focused on accurately presenting your financial status to the IRS on the collection information statement and negotiating a monthly payment that is acceptable both to you and the IRS.
Understand Your IRS Payment Plan And Avoid Having the IRS Revoke Your Installment Agreement
There are a number of things to keep in mind as you make your IRS payments:
- Your future refunds will be applied to your tax debt until it is paid in full;
- Pay at least your minimum monthly payment when it’s due;
- Include your name, address, SSN, daytime phone number, tax year and return type on your payment;
- Review your tax/payment information
- File all required tax returns on time and pay all taxes in full and on time (contact us to change your existing agreement if you cannot);
There may be a reinstatement fee if your agreement goes into default. Penalties and interest continue to accrue until your balance is paid in full. If you are in danger of defaulting on your payment agreement for any reason, contact us immediately.
Our goal at Tax Samaritan is to provide the best counsel, advocacy and personal service for our clients. We are not only tax preparation and representation experts, but strive to become valued business partners. Tax Samaritan is committed to understanding our client’s unique needs; every tax situation is different and requires a personal approach in providing realistic and effective solutions.
If you owe the IRS money, are unable to pay in full and need help with setting up an IRS payment plan, please click the button below for assistance today.
Tax Samaritan is a team of Enrolled Agents with over 25 years of experience focusing on US tax preparation and representation. We maintain this tax blog where all articles are written by Enrolled Agents. Our main objective is to educate US taxpayers on their tax responsibilities and the selection of a tax professional. Our articles are also designed to help taxpayers looking to self prepare, providing specific tips and pitfalls to avoid.
When looking for a tax professional, choose carefully. We recommend that you hire a credentialed tax professional such as Tax Samaritan that is an Enrolled Agent (America’s Tax Experts). If you are a US taxpayer overseas, we further recommend that you seek a professional who is experienced in expat tax preparation, like Tax Samaritan (most tax professionals have limited to no experience with the unique tax issues of expat taxpayers).
Randall Brody is an enrolled agent, licensed by the US Department of the Treasury to represent taxpayers before the IRS for audits, collections and appeals. To attain the enrolled agent designation, candidates must demonstrate expertise in taxation, fulfill continuing education credits and adhere to a stringent code of ethics.
Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.