Types of IRS Installment Agreements for Your Tax Debt Solution

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Long Island Tax Resolution Services

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1) What is IRS Installment Agreement Plan?

• An Installment Agreement is an Internal Revenue Service (IRS) program that allows individuals to pay tax debt in monthly payments. The total amount paid can be the full amount of what is owed, or it can be a partial amount.

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2) General Information about IRS Installment Agreement Plans

• Some taxpayers cannot pay the full amount to IRS.

• The IRS offers “installment agreements” to taxpayers so they can pay the amount over a period of time.

• This reduces the financial burden on taxpayers.

• Understand installment agreements for which you qualify.

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3) Types of Installment Agreements

• The IRS offers four different types of installment agreements, which are as follows:

• Guaranteed Installment Agreements

• Streamlined Installment Agreements

• Partial Payment Installment Agreement

• Non-Streamlined Installment Agreements

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4) Guaranteed Installment Agreements

• The IRS is required to agree to an installment plan if your balance due is $10,000 or less and you meet all of the following criteria:

• You haven't filed late or paid late in the last five years.

• All your tax returns are filed.

• Your monthly installment payments will pay off your balance in 36 months or less.

• You have not had an installment agreement in the last five years.

• You agree to file on time and pay on time for future tax years.

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• A guaranteed installment agreement is most preferred for delinquent taxpayers. The biggest benefit is that the IRS cannotfile a federal tax lien.

• The minimum monthly payment will be the total amount owed divided by number of months the IRS agrees upon for the installment plan.

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5) Streamlined Installment Agreements

• If you don't meet the criteria for a guaranteed installment agreement,

you should consider a streamlined installment agreement.

• In this plan, you must owe a balance of $25,000 or less and agree to

pay it off within 60 months.

• If your balance is set to expire under the 10 year statute of

limitations, the IRS can require full payment within the time leading

up to this deadline.

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• As of March 7, 2012, the IRS agreed to extend installment agreement plans to those owing $50,000 or less.

• The taxpayer agrees to pay off the balance in 72 months or less.

• This is part of the IRS’s “Fresh Start Initiative.”

• The main benefit of a streamlined installment agreement is that IRS will not file a federal tax lien.

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6) Partial Payment Installment Agreements

• If the minimum payments for either the guaranteed or streamlined installment agreements do not fit, consider a partial payment installment agreement.

• Under this type of repayment plan, the minimum monthly payment is calculated based on how much you can afford.

• It also permits longer repayment terms that extend beyond 72 months.

• The IRS may file a federal tax lien to protect its interests in collecting the debts.

• Unlike other plans, the IRS is allowed to regularly re-evaluate the terms and increase monthly minimums based on your ability to pay more.

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7) Non-Streamlined Installment Agreements

• If none of the pre-established plans work in your situation, a non-streamlined installment agreement may need to be negotiated.

• You will be required to directly negotiate terms with an IRS agent.

• The IRS will ask that you provide a financial statement (Form 433-F).

• The IRS will then analyze what you can afford to pay each month.

• The IRS can legally ask you to take out a bank loan, home equity loan, or sell non-essential assets.

• You can pay off the IRS without an installment agreement.

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8) IRS Tax Debt Help

• Delinquent IRS tax debt is difficult to handle.

• Professional help can assist you in determining which plan is best for your situation.

• Tax professionals can talk to the IRS on your behalf.

• Contact Long Island Tax Resolution Services. We can help you decide the best course of action for your individual situation.

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