An IRS installment agreement is one of the best ways to resolve your tax debt problems. You can avoid most types of IRS collection actions and pay off several years of tax debt as long as you make your monthly payment.
Key Insights We Will Discuss:
Why IRS installment agreements are such a popular tax resolution option.
How an installment agreement protects you from IRS levies and liens
How you can modify your installment agreement should you need to
Benefit #1: Avoid IRS Levies
The IRS can seize your bank account or wages to collect back taxes. If you enter into a payment plan, the IRS will generally stop pursuing any type of levy as long as you make your monthly payments.
The one exception is a tax refund offset. The IRS may continue to seize your tax refund checks until your debt is paid off in full.
Benefit #2: Pay Off Several Years of Tax Debt
If you owe tax debt for several years, you may receive a separate set of notices for each year. You may become confused and overwhelmed when trying to figure out what you owe for each period in back taxes, penalties, and interest.
You can pay off multiple years of tax debt with one monthly payment. Before you start, have a tax attorney request your tax transcripts to determine how much you owe for each period.
Benefit #3: More Time to Pay Your Balance
Many taxpayers can get up to six years to pay off their full tax balance using a Streamlined Installment Agreement. If you want to pay off your tax debt more quickly, you can submit a down payment or increase your monthly payment.
Benefit #4: You Can Modify Your Agreement
If you fall behind on your taxes again or need to adjust your payment plan terms, you can request a modification to your agreement. You may be able to add a new balance to your plan by extending your repayment period or decreasing your monthly payment.
If you need to modify your plan, be proactive. You don’t want to risk defaulting on your payment plan, which could result in a termination of your agreement.
Benefit #5: Avoid Federal Tax Liens
You may be able to request a withdrawal of the Notice of Federal Tax Lien if your payment plan meets certain requirements. Generally, you’ll need to pay by direct debit, owe less than $25,000, and meet other conditions before you can ask for the tax lien to be withdrawn.
IRS installment agreements may give you up to six years to pay off your tax debt.
You will be safe from most IRS levies as long as you make your monthly payments
You can request a modification to your agreement at any time.
Have a question? Contact Venar Ayar.