| When you cannot pay back taxes owed to the IRS in | | | | incremental payments to the IRS to pay back the |
| full but you can afford smaller monthly payments then | | | | amount owed plus interest and penalties. Installment |
| you should use a payment plan to pay back the IRS. | | | | agreements are fairly easy to obtain. To apply for one |
| There are 3 types of payment plans and your financial | | | | you can either fill out IRS form 9465 or go to the IRS |
| situation will determine which method you should or | | | | website and fill out the online payment agreement |
| can use. Below are the three different types of IRS | | | | application. To qualify for this type of agreement you |
| payment plans that you can use. | | | | must be able to maintain a minimum monthly payment |
| | | | to the IRS. |
| 1. Delay IRS a few months until you have the means | | | | 3. Partial Payment Installment Agreement - This type |
| to pay - This is not an official type of payment plan | | | | of payment plan is for individuals that cannot make the |
| with the IRS, but you can use predictability of the IRS | | | | monthly minimum payments required with the |
| collections system to your advantage. This method is | | | | installment agreement. With this type of payment plan |
| good if you know you will have the money to pay | | | | the tax payer may end up paying less than the total |
| within a few months and you do not need to setup a | | | | amount of tax owed. Individuals will only qualify for this |
| payment plan over many months. The IRS allows 45 | | | | if they can prove they don't have the means to afford |
| day extensions without much explanation. To do this, all | | | | the regular payment plan. If you are approved for this |
| you have to do is reply to one of the assessment | | | | payment plan, the IRS will request an updated financial |
| notices sent by the IRS stating that you need more | | | | statement for yourself to see if your financial standing |
| time to pay and they will enter a freeze code into the | | | | has improved enough to increase the amounts paid |
| system and give you 45 days to pay. If you still cannot | | | | monthly. |
| pay after this you can simply repeat this and get | | | | If you cannot pay the IRS in full, a payment plan is |
| another 45 days, try to give a small payment with this | | | | always a very safe bet. Once it is setup, you are then |
| one though to show you are trying. Don't do this too | | | | in good standing with the IRS and no collection actions |
| many times because the automated collection process | | | | can be taken against you unless you default on a |
| starts back up where it left off and they will eventually | | | | payment. If you owe more than 25K in back taxes the |
| place a lien on your assets if the tax amount is not | | | | IRS is likely to be more hesitant about setting up a |
| paid off. | | | | payment plan with you, it is best to consult a tax |
| 2. Apply for an Installment Agreement - With this type | | | | professional before trying to settle your back taxes on |
| of payment plan the IRS will allow you monthly | | | | your own. |