IRS Installment Agreements In Ann Arbor, MI

Taxpayers have several pathways available to establish a payment plan with the IRS. The three most frequently used methods include:

1. Submitting a payment plan request through the IRS online portal
2. Arranging a payment plan via the IRS Automated Collection System
3. Negotiating a payment plan directly with an assigned Revenue Officer

Online IRS Payment Plans

Online IRS payment plans can be initiated directly through the IRS Online Payment Agreement application on the official IRS website. However, not every taxpayer meets the eligibility requirements for establishing an online tax debt payment arrangement. The IRS imposes balance thresholds limiting who can qualify, individual taxpayers must owe $50,000 or less in combined tax, penalties, and interest for a simple payment plan, while short-term plans accommodate balances under $100,000. You must also demonstrate the capacity to satisfy your total tax balance within the allowable repayment timeframe. If your outstanding liability exceeds these limits, or if you cannot afford the minimum required monthly payment amount, you will not qualify for the self-service online installment agreement option.

IRS Automated Collection System (ACS)

When a taxpayer contacts the IRS by phone to arrange a payment plan, their call routes to an ACS representative. These IRS collection agents possess the authority to establish installment agreements for most taxpayer situations. Depending on the specific agreement type, total balance owed, and category of tax liability involved, the taxpayer may need to provide detailed financial information or submit supporting documentation such as bank statements and proof of income. When calling ACS, your call connects to the next available representative. If you need to call back with additional requested information, you will speak with a different agent each time, requiring you to re-explain your circumstances.

IRS Revenue Officer

Based on the complexity of your tax situation or the magnitude of your outstanding liability, the IRS may escalate your case to a Revenue Officer for field collection. When your account is assigned to a Revenue Officer, you work with this individual directly to resolve your tax issues and negotiate an installment agreement. A Revenue Officer will require submission of your complete financial disclosure using Collection Information Statements along with all supporting documentation. They may also mandate that you liquidate certain assets, such as vehicles, investments, or property equity, to apply toward your tax debt before approving your installment agreement. Revenue Officers possess significant enforcement authority including the power to issue bank levies and seize personal or business assets. They may also require direct debit installment agreements or impose continuous wage garnishments if you have previously defaulted on payment arrangements. If a Revenue Officer has been assigned to your case, you should seek qualified tax representation immediately.

When evaluating your financial situation, the IRS typically requires completion of either Form 433-A or Form 433-F. Both of these IRS Collection Information Statements contain detailed instructions requiring taxpayers to disclose comprehensive information about their assets, monthly household income, and allowable living expenses. The IRS analyzes any available equity in your assets that could potentially satisfy your tax liabilities. Before approving an IRS installment agreement, they may request that you sell property or obtain secured loans against real estate equity to reduce your tax debt. They may also require liquidation of retirement accounts such as 401(k)s or IRAs, or demand that you borrow against cash value life insurance policies to apply toward your outstanding balance. Your monthly income and expenditures will be scrutinized to calculate your reasonable collection potential and determine what monthly payment amount you can contribute toward your tax obligation.

A common challenge many taxpayers encounter when establishing an installment agreement is that their actual monthly spending exceeds the IRS National and Local Standards for allowable expenses. This disparity leaves the typical taxpayer facing an IRS payment demand higher than what their budget can realistically accommodate. For some individuals, this gap between actual expenses and IRS-allowed amounts represents a difference of hundreds or even thousands of dollars monthly. The following delinquent tax scenario illustrates this predicament:

Johnny Tax owes $80,000.00 in back taxes to the IRS. He decides to attempt resolving his federal tax issue independently without professional assistance. Johnny is contacted by a Revenue Officer and submits his completed Form 433-A along with all requested supporting documentation. Johnny possesses no liquidatable assets applicable toward his tax liability, and his Form 433-A demonstrates that after accounting for monthly expenses, Johnny can afford to pay $150.00 per month toward his back taxes. After analyzing his financial disclosure, the Revenue Officer determines that Johnny’s housing costs exceed the IRS local housing allowance standard and disallows $600.00 monthly from this expense category. The Revenue Officer now demands Johnny pay $750.00 monthly for his installment agreement. Johnny faces a difficult choice: either accept a payment plan he cannot sustain or refuse and risk IRS enforcement action including levies, federal tax liens, or wage garnishment from the Revenue Officer.

To prevent an IRS wage garnishment or being locked into an unaffordable payment arrangement, Johnny needed a qualified tax resolution advocate like Austin & Larson Tax Resolution representing him during this installment agreement negotiation. He needed representation from professionals who understand IRS collection practices, allowable expense guidelines, and procedural rules to help structure his financial disclosure in compliance with IRS regulations. He also needed advocates willing to fight for a manageable tax payment plan by escalating the case to collection managers, IRS Appeals, and the Taxpayer Advocate Service when necessary. Lacking knowledge of IRS collection rules puts the average Michigan taxpayer at a significant disadvantage. Not only are you unaware of what enforcement actions the IRS can legally pursue, but you also don’t recognize what limitations exist on their authority. How can you determine whether they’re permitted to disallow certain expense categories or what deductions must be honored?

This is precisely why partnering with experienced tax debt resolution professionals at Austin & Larson Tax Resolution is essential to protecting your taxpayer rights and securing the most favorable IRS back tax installment agreement available under your circumstances.

Call (866) 668-2953 to explore your IRS tax settlement options with true federal tax specialists.