IRS Installment Agreements: The Ins-And-Outs

One of the most common methods used by taxpayers to settle back taxes is through IRS Installment Agreements. An installment agreement does not have to be financially back-breaking. It does not matter whether you owe a small amount or a large amount.

There are a variety of IRS Installment Agreements offered. Your tax attorney can advise you which plan you may qualify for and immediately get you started on preparing your request for IRS tax relief.

The First Step

The first step in seeking an IRS Installment Agreement should be to call a qualified tax attorney. You need experienced guidance and will benefit by having a tax expert who is a skilled IRS negotiator on your side. Attempting to work out a compromise with the IRS on your own can cause you miss your best financial resolution.

There are many factors that will determine what your options are. You need to consult with your tax attorney to learn what the guidelines and requirements are. Tax professionals are current on all requirements regarding IRS Installment Agreements.

The IRS is bound by a statute of limitations allowing them ten years from the date of the original assessment to pursue collection. If your tax debt has exceeded that time frame, your tax professional can confirm if any action is required on your part.  In many cases, the statute of limitations has been unknowingly extended by the taxpayer.

Types of IRS Installment Agreements

Available IRS Installment Agreements are based on the amount of your back tax debt:

- If you owe under $25,000.00 in back taxes - A tax attorney will pursue a Streamline Installment Agreement that will allow you to have your tax debt repaid in 5 years. They will assess your income, living expenses and debt-income ratio to obtain a payment plan compatible with your financial status.

- If you owe more than $25,000.00 in back taxes - A tax attorney may be able to help you qualify for a Long-Term Installment Agreement. A Form 433, Collection Information Sheet must be completed and your Request for Installment Agreement submitted.

Benefits of Professional Tax Help

A tax professional is knowledgeable of the tax laws and codes that govern IRS collections. They understand how the IRS determines the qualifications for obtaining an installment agreement, and what other options are available for IRS tax relief.  Once the tax debt is confirmed, they will begin negotiations to obtain a fair and affordable IRS Installment Agreement.

In the event that you do not qualify for and installment agreement, experienced tax experts are knowledgeable of all options afforded by the IRS. They are skilled in negotiating Offers in Compromise, penalty abatement, and debt reduction.