Installment Agreement Option
Sometimes life becomes overwhelming with emotional events such as a death in the family, divorce, or illness. Before you know it you’re in over your head in tax debt. If you have large amounts of tax debt and cannot pay it off in one large lump sum, the IRS offers the option of Installment Agreements.
Wiggam Law tax attorneys will assist you in preparing for and negotiating Installment Agreements with the IRS.
What Is an IRS Installment Agreement?
According to the IRS, “A payment plan is an agreement with the IRS to pay the taxes you owe within an extended timeframe.” When you are unable to pay the taxes owed by the due date, filing a request for an installment agreement will prohibit additional penalties and fines, stay out of IRS collections, and suspend or prolong the due date.
What Type of Payment Plans Does the IRS Offer?
There are several payment agreement options that vary in length and terms available. The IRS evaluates the amount owed, the collection expiration date, and your financial situation.
Your specific situation will determine what type of installment agreement will be available.
If you can pay in a short amount of time, short-term installment agreements are an option. They extend the due date by 180 days.
A long-term installment agreement is active for 72 months, during which you are expected to pay the full amount of tax debt.
There are also partial-pay installment agreements available. These are hardship payment plans where you cannot afford to pay the IRS in full.
With these plans, you make payments until the collection statute expiration date, and then, after that, the IRS doesn’t require you to repay the remaining portion of the debt.
If you are also behind on your state taxes, you will need to negotiate an arrangement with your state tax agency. Most states, including Georgia, offer payment plans on back taxes.
Do You Qualify for an IRS Installment Agreement?
The IRS offers various payment plan types based on the amount you owe. If you owe less than $100,000, you will qualify for various installment agreements without any consideration of your ability to repay the tax debt. Over $100,000, the IRS will look at your income and assets and consider your ability to repay them before granting an installment agreement.
In order to qualify for a long-term installment plan, you must be current on all tax return filings and payment requirements.
No matter what your situation is, the tax attorneys at Wiggam Law can help you find a solution that fits your financial circumstances.
If you qualify for an Installment Agreement, you will:
- Pay Off Tax Debt in Affordable Monthly Installments
- Prohibit IRS Collections
- Avoid Tax Liens or Levies
- Suspend or Prolong the Payoff Date
While interest and fees continue to accrue during an Installment Agreement, the benefits far outweigh the alternatives.
What Happens When You Request an IRS Payment Plan?
When you request a payment plan with the IRS, it is either accepted or rejected.
If the IRS accepts your request for a payment plan, it is your responsibility to stay out of default by:
- Paying All Monthly Payments on Time Until Paid in Full
- Filing Tax Returns and Paying Them on Time
If a request for a payment plan is rejected, you have the right to appeal. However, there are time constraints for appeals. A tax attorney from Wiggam Law can help you quickly file the paperwork for an appeal and represent you in Tax Court.
IRS Payment Plan Process
In order to request a payment plan, there are a number of forms and documentation that have to be collected and organized. This is often the most difficult part of the payment plan process because it involves filing tax returns from previous years.
After all documentation has been gathered, all previous tax returns must be completed and filed.
The last step in the payment plan process is to file a request for a feasible payment plan. It must be an achievable amount that can be paid on a monthly basis for up to 6 years.
Wiggam Law tax attorneys have the professional capability to guide you through the entire process in order to obtain a suitable tax resolution.
Once the IRS approves your installment agreement, you must make your payments on time. You also should not incur any new tax debt. If you break the rules of your agreement, the IRS will send you Notice CP523 letting you know that your installment agreement has been terminated.
Streamlined IRS Installment Agreement
The IRS offers a number of different types of payment plans, including a Streamlined Installment Agreement.
In order to qualify for the Streamlined Installment Agreement, you must:
- Owe $50,000 or Less as an Individual and Be Able to Pay off the Debt Within 72 Months
- Owe $25,000 or Less as a Business and Be Able to Pay off the Debt Within 24 Months
The main advantages of the streamlined installment process are that you do not need to provide any financial information and the IRS will not file a federal tax lien if they have not already done so. As long as the debt can be paid in full within 72 months and pay a minimum amount of $25 per month, a taxpayer qualifies for the Streamlined Installment Agreement.
IRS Installment Agreement Success Stories
$130,984 Saved
The Georgia Department of Revenue accepted our Offer in Compromise to settle the taxpayer’s $141,000 liability for $10,016 — 7% of the original balance due, — allowing the taxpayer to pay the new balance due in a payment plan over time.
$57,000 Saved
We saved our client $57,000 not only by submitting an Offer in Compromise with the Georgia Department of Revenue that reduced their $117,000 tax liability by more than $30,000 but by negotiating a 60-month interest-free payment plan that saved them an additional $24,000 in interest.
Contact Our Tax Attorneys in Atlanta, GA
Wiggam Law tax attorneys have a unique ability to help you organize your tax paperwork and filings, develop a plan, and negotiate an appropriate Installment Agreement for your unique financial situation.