The IRS allows taxpayers a number of ways to arrange payment of their back tax liabilities. Our goal is to help you set up an installment agreement that not only is compliant with the IRS but is an option that works for your specific needs and budget. We want to help our clients to pay the minimal amount in the fastest time possible to minimize accumulated interest.
When Does an Installment Agreement Make Sense?
1) The taxpayer is unable to pay their tax liability all at once
2) Your Offer In Compromise was rejected by the IRS
3) You have no other lower interest means to cover your tax liability
The best way to get the most beneficial Installment Agreement is to have a licensed tax professional (Enrolled Agent, Tax Attorney, CPA) submit your filings and negotiate with the IRS for you.
Different Types of Installment Agreements
1) Guaranteed Installment Agreements
These are the easiest Installment Agreements to qualify for. if you meet the requirements, you are accepted.
If you owe $10,000 or less and can pay the balance plus interest and penalties within 3 years or by the Collection Statute Expiration Date (CSED) you qualify. Businesses do not qualify for these installment plans.
2) Streamlined Installment Agreements (SIA)
For individuals who owe less than $100,000 in tax debt
Agreement Term – Up to 84 months to pay
For businesses that owe less than $25,000 in tax debt
Agreement Term – Up to 36 months for income tax debts
One benefit of the Streamlined Installment Agreement is that they require no financial disclosure.
3) Financially Verified Installment Agreement
If the individual taxpayer does not qualify for a Streamlined Installment Agreement they would have to submit a full financial disclosure of income, debts, expenses, and assets for Installment Agreement consideration. It is highly suggested that a taxpayer secure professional tax assistance in such cases.
4) Partial Payment Installment Agreement (PPIA)
A PPIA is when the IRS agrees to initial smaller monthly payments than a normal installment agreement, usually for 1 year and then the agreed amount increases in order to fulfill the total tax liability. This could be an option if an initial Offer in Compromise was rejected. The IRS will review your financial status every two years.