Payment Agreements
If you cannot pay all that you owe now and do not qualify for an offer in compromise, an IRS installment agreement may be your next best option. Payment Agreements allow you to pay IRS debt in full in smaller, more manageable amounts, usually in equal monthly payments. The amount of your installment payment will be based on the amount you owe and your ability to pay that amount within the time available to the IRS to collect tax debt from you.
A tax settlement attorney can help you to set up a payment agreement with the IRS.You should be aware, however, that an IRS payment plan is more costly to you than paying all the taxes you owe now or borrowing funds to pay the amount you owe. Why? Because the IRS charges interest and penalties on the tax you owe and charges interest on the unpaid penalties and interest that have been charged to your tax account.
So, while you are making payments on your tax debt through a Payment Agreement, the IRS continues to charge interest and penalties on the unpaid portion of that debt. The interest rate on a bank loan or cash advance on your credit card may be lower than the combination of penalties and interest that the IRS charges.
Another cost associated with a Payment Agreement is the initial setup fee of $120 charged by the IRS.
Even if you agree to a Payment Agreement, the IRS may still file a Notice of Federal Tax Lien to secure the government’s interest until you make a final payment. However, the IRS cannot levy against your property (1) while your request for a Payment Agreement is under consideration, (2) while your agreement is in effect, (3) for 30 days after your request for an agreement has been rejected, or (4) for any period while an appeal of the rejection is being evaluated by the IRS.
We can conduct an evaluation of your current tax situation and make some recommendations. If we find an area of concern, you can rest assured that by engaging our services, our office will act as your advocate and seek to resolve your IRS problems.
For prompt evaluation of your case, we encourage you to contact us. You may also contact us using our toll-free number at 866.494.6829