How does Installment Agreement Work?

The IRS understands you may not be able to pay the entirety of your outstanding tax debt. The types of installment plans offered by the IRS depend on the size of the outstanding tax debt.

For amounts less than $10,000, individuals may be eligible for a guaranteed installment agreement. Some of the requirements of this plan are: must be able to settle the debt in 120 days or when due, must be ready to pay of the debt within three years and be able to make a minimum monthly payment as calculated by tax liability, interest and penalties divided by 30.

Generally, if you owe less than $50,000 and filed all required returns, you may apply for a long term payment plan. If you owe less than $100,000 in combined taxes, penalties and interest, it is possible to apply for a short term payment plan.

One major benefit is the IRS is prevented from levying your property as long as you keep payments to the installment agreement current. Unfortunately, as you make payments, you will be paying and accruing interest and penalties. The best option remains to pay off the entire debt.

With the right help and resources, this is a manageable process and we can help get it started.