If you find yourself unable to make the minimum monthly installment payment, you can negotiate a monthly payment amount that fits your budget by completing Form 433-F and working with the IRS employee assigned to your case. However, you’ll need to show that your financial situation justifies a payment below the typical IRS standards.

Installment Agreement Requests

The IRS prefers taxpayers to pay a certain amount towards their tax debt each month. The minimum payment amount is generally calculated by diving your balance by 72.

If you can afford to pay this amount, you may qualify for a streamlined installment agreement request, and you may not have to complete a Collection Information Statement.

If you can’t pay this much each month, you can still get an IRS installment agreement. By completing the Collection Information Statement, you can show the IRS why you’ll need a lower monthly payment amount to keep up with your other expenses.

Sometimes, the IRS may determine that your expenses are too high in certain categories and try to adjust your monthly payment amount. A tax attorney can help you work out a payment plan that works for you and also satisfies the IRS.

Installment Agreement Modifications

Your payment plan may last for several years, so it’s possible you’ll experience some financial changes during this time. If you can no longer pay your minimum monthly payment, your best strategy is to be proactive.

If you miss a payment, your plan may go into default. When this happens, the IRS can use enforced collection actions—such as bank account levies—to recover your remaining unpaid balance.

You can avoid this situation by seeking a payment plan modification. Once again, certain modifications can be made without submitting a new Collection Information Statement, but others will require financial proof and negotiation.

Tax Settlement

You may also be able to negotiate a partial payment installment agreement, which involves some debt forgiveness once the collection statute of limitations expires. These agreements can be difficult to get, so ask a tax attorney whether your case may qualify.

Have a question? Contact Venar Ayar.