IRS Installment Plans
If you are unable to pay your tax debt in full right away, the IRS might agree to let you pay it off on a month to month installment plan. The IRS may be difficult to work with, but they are practical in the sense that they know you may not have all the money right away. IRS installment plans allow taxpayers to pay money towards their tax balance overtime as a form of tax resolution. This is typically the easiest way for the IRS to collect their payment.
Installment plans are the most reliable option that works for the IRS and for you. However, usually with installment plans you have to pay interest, penalty fees, and a set up fee, just like when you buy a car. With success, this method of tax resolution can get you back on track and eventually allow you to be free of your tax balance.
An installment agreement can either be formal or informal. Through an informal installment agreement, taxpayers promise to make monthly payments at an agreed upon amount in which the taxpayer pays off their tax balance within two years. Through a formal installment agreement, the taxpayer signs a written agreement with the IRS agreeing upon monthly payments at a specified amount.
If the IRS has set your installment payment amount too high, you can hire a tax representative to speak with the collection employee’s manager. If your representative is unable to lower the amount of the installment payment, your representative can appeal the matter to the IRS appeals office.
What are the benefits of an IRS installment plan?
- Avoid further penalties
If you fail to talk to the IRS, they can take further action against you such as wage garnishment. By setting up an installment agreement, you stay in good terms and the IRS will continue to have trust in you.
- Help your credit
If your credit score dropped because of your unpaid tax balance, setting up an installment agreement and paying your payments ontime will help improve your credit score.
- Ensure future refunds
By setting up an installment plan with the IRS, you can ensure that you will receive a federal tax refund in the upcoming future.
The IRS has many ways to pay off your tax balance. The Tax Defense Group is determined to help set up a payment plan that works for you and your financial standing. Call us now to see how we can help you today!