Every year Uncle Sam hands American taxpayers a bill and requires that they pay what’s due. In many cases, the individual or business may receive a refund or zero bill. However, for others, they may still owe the agency money in federal taxes.

So, what happens if you’re unable to pay what’s due? If you cannot afford to pay your taxes in full, you may be able to negotiate an installment agreement with the IRS.

What is an IRS Tax Installment Agreement?

An Installment Agreement with the IRS is an agreement that is negotiated between you, the taxpayer, and the IRS that allows you to make monthly payments to pay back your tax debt over a period of time. Setting up this payment plan can relieve taxpayers from the stress of collections, wage garnishments, or bank levies.

Once the terms of the agreement are negotiated, the IRS will accept these payments towards your tax debt until the entire amount is paid off. However, it is important to realize that this agreement does not release the taxpayer from interest and penalties incurred as a result of the delayed tax payments, but it does reduce the penalty rate.

Who Qualifies for a Tax Installment Agreement? What are the Requirements for an Installment Agreement?

Before committing to an agreement with the IRS, it is important to understand whether you meet the eligibility criteria and can agree to the installment agreement terms, which include:

• You must have the last six years of tax returns filed

• If you are unable to fully pay your tax liabilities within 6 years with a Standard Installment Agreement, then you must supply financial information to determine what you can pay.

• That financial information may result in you getting into Currently Not Collectible Status; or

• Paying a smaller than standard amount with a Partial Pay Installment Agreement; or

• A Manually Monitored Installment Agreement for more complicated situations

How an Experienced Tax Lawyer Can Help with IRS Installment Agreements

Taxes can be confusing, but they don’t have to be. The best way to navigate your taxes is to hire a tax lawyer who has experience in dealing with IRS issues and can help you understand how it all works.

At JD Tax Law, we are a full-service tax law firm with a proven track record of success. We represent individual and business taxpayers in all aspects of tax resolution, including IRS tax debt relief and installment agreement negotiation. Our team has over 15 years of experience dealing with the IRS, and we have successfully resolved countless tax issues and provided relief for hundreds of clients.

To get a tax resolution plan that is tailored to your specific tax situation, please contact us for a free, no-obligation consultation.
Schedule a time that works best for you, or just give us a call now!