IRS Installment Agreement Options Available
The IRS offers installment agreement options for taxpayers to pay their back taxes. These installment agreement options range in length from a 120-day extension to a payment plan that lasts through the collection statute’s end date. Which installment agreement you qualify for will vary depending on how much tax you owe, the type of tax, the age of the tax, and your ability to pay. For instance, a Michigan taxpayer that owes $3,000.00 on their current year return will qualify for a very different installment agreement than a taxpayer that owes $100,000.00 for tax debt spanning over the last 6 years.
One thing that is common for all IRS installment agreements is that you must be in compliance with your return filing before the IRS will establish an installment agreement. Once the agreement has been established, you cannot accrue any new tax debt, or the agreement can default.
The IRS may also continue to assess interest and penalties against you while your installment agreement is in effect. The IRS will keep any refunds from your tax returns and apply them to your back tax balances.
Contact Austin & Larson Tax Resolution. We will review the details of what you owe and present to you the possible installment agreement options to resolve your predicament with an optimal settlement solution.
Call us now at 1-866-668-2953 for immediate tax debt help to prevent an IRS levy or for the removal of a tax lien.
How Do You Request an Installment Agreement With the IRS
There are several different ways to request a payment plan with the IRS. The three most common options are:
- Requesting a payment plan online
- Requesting a payment plan through IRS Automated Collection System
- Requesting a payment plan through a Revenue Officer.
Online IRS Payment Plans
Online IRS payment plans can be established directly through the IRS website. However, not all taxpayers meet the criteria for an online IRS debt settlement payment plan. The IRS has a cap on the amount of taxes you can owe to be eligible to set up an online installment agreement. You also must be able to pay your tax balance in full over a set number of months. If your tax balance is too high, or if you are unable to meet the monthly payment amount, you will not qualify for an online installment agreement.
IRS Automated Collection System (ACS)
When a taxpayer contacts the IRS to establish a payment plan, they will be connected to an ACS agent. This IRS agent has the authority to set up installment agreements for most taxpayers. Depending on the type of installment agreement, the amount owed, and the type of taxes, the taxpayer may be required to provide their financial information or supply supporting documentation. When calling ACS, the taxpayer will be connected to the first available agent. If you must call back to provide additional information, you will be connected to a different agent every time.
IRS Revenue Officer
Depending on your specific tax issues or the amount of taxes you owe, the IRS may assign your file to a Revenue Officer. If your file is assigned to a Revenue Officer, you will work with this person directly to resolve your taxes and establish an installment agreement. A Revenue Officer will require you to send them your financial information along with your supporting information. They may also require you to liquidate some of your assets to apply toward your tax debt before they will establish your installment agreement. A Revenue Officer can issue levies and seize your assets. They may also require you to set up an installment agreement as a direct debit or place an ongoing levy on your wages if you have defaulted on payment plans in the past. If a Revenue Officer is assigned to your file, you should seek representation immediately.
IRS Installment Agreement Form 433-A and Form 433-F
When reviewing your financial information, the IRS generally requires either form 433-A or 433-F. Both of these IRS forms have instructions that require the taxpayer to provide information on their assets and on their monthly income and expenses. The IRS will look for any equity in your assets that could be used to pay your tax liabilities. Before establishing an IRS installment agreement, they may request that you sell property or take loans against it to pay your tax debt. They may also require you to cash out retirement accounts or life insurance to apply towards your tax debt. Your monthly income and expenses will also be reviewed to determine what amount you can pay towards your taxes every month.
One problem that many taxpayers have in setting up an installment agreement is that the amount that they spend each month is greater than the amount that the IRS allows them to claim in monthly expenses. This leaves the typical taxpayer in a situation where the IRS is requesting a payment higher than what the taxpayer can afford. For some taxpayers, this could be a difference of hundreds or thousands of dollars a month. The following delinquent tax example illustrates this issue:
Johnny Tax owes $80,000.00 in back taxes to the IRS. He decides that he is going to attempt to handle his IRS issue on his own. Johnny is contacted by a Revenue Officer and he provides his form 433-A and his supporting information. Johnny has no assets that he can use to pay his tax liability and his form 433-A shows that after his monthly expenses, Johnny can afford to pay $150.00/mo towards his back taxes. After reviewing his information, his Revenue Officer finds that Johnny is spending too much a month on housing expenses and denies $600.00/month of this housing expense. The Revenue Officer is requiring Johnny to pay $750.00/mo for his installment agreement. Johnny is now faced with a situation where he can either get into a payment plan that he cannot afford or he can refuse and face possible IRS levy, lien, or garnishment from the Revenue Officer.
To stop an IRS garnishment or an unpayable plan, Johnny needed an IRS tax relief advocate like Austin & Larson Tax Resolution on his side to request this installment agreement. He needed someone who knows IRS practices and procedures to help him with the financial guidelines so he could get his expenses in line with IRS regulations. He also needed someone who would fight for a tax payment plan that he could afford, taking the case to managers, appeals, and independent reviewers.
Not knowing IRS rules puts the average Michigan taxpayer at a huge disadvantage. Not only do you not know what the IRS can do, but you also don’t know what they can’t do. How do you know that they are allowed to deny certain items or what can be allowed?
This is where an experienced Austin & Larson Tax Resolution company is essential to ensuring your tax rights are protected and that you get the best IRS back tax installment agreement available to you.
Call (866) 668-2953 for your IRS tax settlement options from true IRS specialists.
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We understand how frustrating tax related issues can be and we are here to help resolve your unpaid taxes once and for all. Our team has extensive experience working with the IRS on our clients' behalf to fully resolve tax liabilities, and we would love the opportunity to do the same for you. Reach out for a free consultation today!
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