INSTALLMENT AGREEMENT
When you owe money to the Internal Revenue Service (IRS) that you are unable to pay in one lump payment, you may be eligible to make regular monthly payments through an installment agreement.
The installment agreement is a method of tax debt resolution that allows an individual to pay off their balance over a period typically ranging from 6 months to ten years. Depending on the amount owed to the IRS or state tax agency, the period can vary. ABE’S ATS determines the amount of each monthly payment based on the taxpayer’s personal assets, property and other financial information and negotiates with the IRS to achieve that payment. These agreements come in many forms to accommodate other financial obligations and the needs of the taxpayer while still satisfying IRS or state tax debt
IRS Installment Plans
If you cannot pay your tax debt in full, the IRS may agree to let you pay it off gradually in monthly installments.
The IRS may be a difficult and impersonal entity to work with, but it is also highly logical and practical. The agency understands that it simply cannot take money that doesn’t exist. By allowing taxpayers to pay down a debt over time as a form of tax resolution, this can often be the easiest and best way for the agency to collect all the money it is owed. And, since the IRS collects interest on past due amounts, it does not actually burden the agency financially to allow someone to pay gradually.
Installment plans are often very viable options that work well for both the IRS and the taxpayer. Though you will usually have to pay penalties and interest, setting up a payment plan through successful tax resolution can get you back on a track, eventually becoming free of your tax debt.
An installment agreement can be either formal or informal. In an informal installment agreement, the taxpayer promises to make monthly payments in an agreed amount which will pay off his balance within two years. A formal installment agreement is a written agreement in which the taxpayer promises to make, and IRS agrees to accept, monthly payments in a specified amount. A taxpayer can allocate payments, such as against the trust fund portion of employment taxes, under an informal installment agreement but not under a formal installment agreement.
IRS collection personnel are generally reasonable people. If an IRS collection employee sets a taxpayer’s installment payment at an amount which the taxpayer’s representative believes is too high, the representative can speak with the collection employee’s manager. If the representative is unable to resolve the amount of the employee’s installment payment by talking with the collection employee’s manager, he can appeal the matter to the IRS appeals office.
The IRS allows numerous ways for arranging to pay a delinquent tax liability. At ABE’S Accounting & Tax Solutions, our goal is to set up a payment option that works for you, pays off the tax debt in the shortest amount of time, and will keep the interest accumulation to a minimum.
