An IRS payment plan or Installment Agreement is an agreement between a Taxpayer and the IRS to pay a back tax liability over time. This is a viable alternative when the IRS is demanding full payment up-front or a payment plan that is substantially higher than what you can afford to pay.
Eligibility: To qualify for an IRS payment plan, you must be current and compliant with all tax filings and payments. This includes making current Federal Tax Deposits as a business and estimated tax payments (or sufficient withholding) as an individual.
Types of IRS Payment Plans: The IRS has many Payment Plan programs available that allow taxpayers to pay their liabilities over four to ten-year periods. The payment plans available to you will depend on the type and amount of taxes that you owe.
Agreeing to a payment plan that is within your budget: The main issue with an IRS payment plan is obtaining a monthly payment that is within your budget. IRS payment plans are set by determining your monthly disposable income. Often, taxpayers do not take the time and care necessary when providing this information to the IRS and end up with a monthly payment that they cannot afford. This is the worst thing that can happen. A new tax accrual will default the IRS payment plan and lead to additional penalties as well as increased IRS collections efforts.
We will assist you with obtaining an IRS Payment Plan that is within your budget. The key to this is knowing which expenses are allowed and to what extent. By establishing a reasonable monthly payment plan which allows you to stay current, you can rest assured that the IRS will not take additional collections actions such as a levy of bank accounts or garnishment of wages.