The most common method for taxpayers to pay their outstanding tax debt is through an Installment Agreement: an agreement between the taxpayer and the IRS to pay the liabilities in monthly installments over a set period of time. An Installment Agreement does not prevent interest or late-payment penalties from accruing.
Types of Installment Agreements:
- Streamlined Processing of Installment Agreements: Individual taxpayers who owe less than $100,000 will generally be eligible for a Streamlined Installment Agreement, which does not require the submission of financial information to the IRS. There are different categories of Streamlined Installment Agreements:
- Balance less than $25,000: The IRS will generally approve an Installment Agreement for up to 72 months. If you qualify for this criteria, then the IRS will not file a lien.
- Balance $25,001-$50,000: The IRS will generally approve an Installment Agreement for up to 72 months. If the IRS has not yet filed a lien, it will not file one provided your payments are made automatically by use of either direct debit or payroll deduction.
- Balance $50,001-$100,000: The IRS will generally approve an Installment Agreement for up to 84 months, provided you agree to make payments by use of either direct debit or payroll deduction. Under this criterion, the IRS will generally file a lien. This kind of streamlined installment agreement is not available if your case has already been assigned to a Revenue Officer for collection.
- Non-Streamlined Installment Agreements: If you do not meet the Streamlined criteria, or you are unable to make the payments associated with the Streamlined criteria, then you can enter into an Installment Agreement with the IRS based on your ability-to-pay. For this, you will have to provide a Collection Information Statement that lists information about your income, expenses, and assets.
The experienced professionals in Goldin Peiser &Peiser’s IRS Representation and Defense Services have decades of experience dealing with the IRS. If you owe taxes, contact us to discuss your eligibility for an installment agreement or other IRS tax resolutions.