| Qualify for an IRS Installment Agreement and Save | | | | or personal property acquired in the future while the |
| Money by Negotiating the Lowest Possible Monthly | | | | lien is in effect. Generally, the lien is effective |
| Payments | | | | throughout the 10 year Collection Statute of Limitations. |
| IRS Announces Unprecedented Opportunity for | | | | The Benefits of Hiring Professional Tax |
| Recession-Burdened Americans to Settle Outstanding | | | | Representation to Negotiate your IRS Payment Plan |
| Tax Debts | | | | Whether the IRS demands full payment up-front or a |
| Struggling taxpayers may be eligible for tax breaks as | | | | payment plan that is substantially higher than what you |
| the IRS eases enforcement and collection efforts to | | | | can afford to pay, a professional tax resolution |
| help Americans in financial distress. Because of the | | | | specialist can help you negotiate an arrangement for |
| extraordinary challenges of today’s economy, the | | | | the lowest possible monthly payment and also provide |
| IRS is pledging to be more forgiving of Americans who | | | | you with various options for making those payments. |
| have fallen behind on their taxes due to unusual | | | | Additionally, if you owe more than $10,000 to the IRS, |
| financial hardship. | | | | you will be required to provide full financial disclosure |
| And one way you can settle your back taxes is by | | | | and you will need to hire specialized tax representation |
| negotiating an Installment Agreement with the | | | | to negotiate on your behalf with the IRS. |
| government that that allows you to pay liabilities over | | | | IRS Pledges Greater Flexibility to Help Distressed |
| time. | | | | Taxpayers |
| If you cannot afford to make monthly payments and | | | | Although the IRS is pledging to be kinder and gentler to |
| don’t qualify for another type of tax relief, such as | | | | taxpayers in these challenging times, you will still need |
| an offer in compromise, there are other options | | | | to meet your installment payment requirements. |
| including negotiating that your account be placed in a | | | | However, the IRS has announced that they will try to |
| \"currently not collectible\" status so that you will not be | | | | be more flexible with taxpayers who miss an |
| required to make payments and the IRS will not pursue | | | | installment payment. |
| collection action. | | | | “We need to ensure that we balance our |
| What is an IRS Installment Agreement? | | | | responsibility to enforce the law with the economic |
| An Installment Agreement is a payment arrangement | | | | realities facing many American citizens today,” IRS |
| whereby the government allows a taxpayer to pay | | | | Commissioner Douglas Shulman said. “We want to |
| liabilities over time. Once a payment plan is established, | | | | go the extra mile to help taxpayers, especially those |
| the IRS will not take enforced collection action, including | | | | who’ve done the right thing in the past and are |
| the levy of bank accounts or wages, as long as the | | | | facing unusual hardships.” |
| taxpayer remains current with all filing and payment | | | | If a taxpayer with an existing installment agreement is |
| obligations. However, interest and penalties would | | | | worried about missing a payment because of a job |
| continue to accrue until the outstanding balance is | | | | loss or other financial hardship, Shulman has assured |
| satisfied. Additionally, a tax lien may be filed as part of | | | | the public that a missed payment will no longer lead to |
| the terms of the installment payment agreement, | | | | an automatic end to that agreement. |
| depending on the amount of the total liability. | | | | Additionally, the IRS has announced that it is more likely |
| How to Negotiate an IRS Installment Agreement and | | | | to forgive a missed payment and they’ve |
| Set Up a Payment Plan for Your Tax Debt | | | | instructed staff to not automatically default someone |
| The IRS encourages taxpayers to pay what they | | | | who is having trouble. |
| owe as quickly as possible. For those individuals or | | | | Frequently Asked Questions about IRS Payment Plans |
| businesses not able to resolve a tax debt immediately, | | | | What do you have to do to be eligible for an |
| an installment agreement can be a reasonable | | | | installment agreement? |
| payment option. Installment agreements allow for the | | | | To be eligible for an installment agreement, all returns |
| full payment of the tax debt in smaller, more | | | | that are due must first be filed. |
| manageable amounts. | | | | What are the payment terms? |
| In most cases, the IRS will accept some type of | | | | Installment agreements generally require equal monthly |
| payment arrangement for past due taxes. In order to | | | | payments. The amount of an installment payment will |
| qualify for a payment plan with the IRS you must meet | | | | be based on the amount owed and on the |
| the following rules and provide the IRS with this | | | | taxpayer’s ability to pay that amount within the time |
| information: | | | | legally available for the IRS to collect. By law, the IRS |
| * You must have filed all tax returns (It\'s OK to owe | | | | has the authority to collect outstanding federal taxes |
| money but you must file). | | | | for ten years from the date of assessment. |
| * You will need to disclose all assets owned including | | | | What are the conditions of an installment agreement? |
| all cash and bank accounts. | | | | As a condition of an installment agreement, any refund |
| * You must not have adequate cash available in a | | | | due in a future year will be applied against the amount |
| checking, savings, money market, or brokerage | | | | owed. Therefore, taxpayers may not get all of their |
| account to pay the IRS. | | | | refund if they owe certain past-due amounts, such as |
| * You must not have the capacity to borrow the | | | | federal tax, state tax, a student loan, or child support. |
| amount owed to the IRS from other sources (i.e., a | | | | The IRS will automatically apply the refund to the |
| second mortgage on your home). | | | | taxes owed. If the refund does not take care of the |
| * You must not have adequate equity in a retirement | | | | tax debt, then the installment agreement continues until |
| account from which you can borrow or liquidate; for | | | | all of the terms are met. |
| example, IRA\'s or 401K\'s. | | | | Does interest stop with an installment agreement? |
| The total dollar amount you owe usually dictates with | | | | Interest does not stop accruing until the entire obligation |
| whom the negotiations will be handled. | | | | is paid. An installment agreement is more costly than |
| * Typically, IRS Revenue Officers are not involved in | | | | paying all the taxes owed now. Penalties and interest |
| cases where the amounts owed are less than | | | | continue to be charged on the unpaid portion of the |
| $25,000. | | | | debt throughout the duration of an installment |
| * The IRS will ask you to complete a personal financial | | | | agreement. |
| statement and if a business is involved, you will also | | | | Are there fees to set up an installment agreement? |
| need a business financial statement. | | | | The IRS charges a user fee of $43 to set up the |
| * The IRS has determined allowable monthly expenses | | | | installment agreement. And it is possible for an |
| for individuals, which will be matched against your | | | | installment agreement to be reinstated if the |
| actual monthly expenses. | | | | agreement defaults. |
| * The difference between your monthly income and | | | | Also, installment agreements may be restructured to |
| your allowable monthly expenses will be the amount | | | | include additional amounts owed in one agreement. |
| that the IRS will require you to pay on a monthly basis. | | | | Reinstating or restructuring an existing installment |
| These monthly payments will continue until your | | | | agreement will cost an additional $24 user fee. |
| outstanding tax liabilities are paid in full. | | | | What are enforced collection actions? |
| What the IRS May Not Tell You About Payment Plans | | | | Generally, IRS enforced collection actions (levy against |
| It is important to note that the IRS continues to add | | | | personal or real property) are not made while an |
| penalties and interest while you are making monthly | | | | installment agreement request is being considered, or: |
| payments. This may cause you to be paying what you | | | | While an agreement is in effect, |
| consider a large monthly payment to the IRS and your | | | | * For 30 days after a request for an agreement has |
| outstanding balance may in fact be increasing due to | | | | been rejected, and |
| additional penalties and interest. | | | | * For any period while a timely appeal of the rejection |
| The IRS may not explain this to you! So be careful! | | | | or termination is being evaluated by the IRS. |
| Additionally, for taxpayers that enter into an installment | | | | Can my installment agreement be defaulted? |
| agreement, the IRS may require a signed waiver to | | | | Yes. Failure to make timely payments can default the |
| extend the time IRS can collect. While it is always in | | | | agreement. A defaulted installment agreement could |
| the best interest of the IRS to get a signed waiver, it | | | | subject a taxpayer’s account to enforced |
| may not be in the taxpayer\'s best interest. If you are | | | | collection action and potentially have a negative effect |
| asked to sign a waiver, protect your rights, seek the | | | | on a taxpayer’s credit standing. |
| advice of a tax resolution expert first. | | | | What is an annual statement of balance due? |
| The IRS in most cases, to protect their interest, will file | | | | In accordance with the law, installment agreement |
| a Notice of Federal Tax Lien, with the County | | | | taxpayers receive an annual statement from the IRS. |
| Recorder’s office in the county you reside. This | | | | The statement provides the amount owed at the |
| will inevitably be reflected on your credit report | | | | beginning of the statement period, the payments |
| decimating your credit (FICO) score. In addition a | | | | (credits) posted to account(s), any fees or |
| recorded Federal Tax Lien means the IRS has a | | | | assessments, and the ending balance. Currently, the |
| monetary interest (claim) against all real and personal | | | | annual statement is sent each year in July. |
| property owned (at time of filing) and any and all real | | | | |