Setting up an installment agreement with the IRS may be a good way to help you pay off your debt with the IRS if you cannot pay the full amount all at once. An installment agreement allows your tax debt to be paid off over time by breaking it down into a series of affordable, equal monthly payments.
The amount of each monthly payment is determined by considering the overall tax bill and your ability to pay. These payments must be made on time and failure to do so can default the agreement. This special monthly installment plan can be requested online (if your balance due is not more than $50,000) or by using IRS Form 9465 and the IRS charges a fee to set up the installment agreement. As with other payment options, you’ll first need to file any outstanding back tax returns before applying for this option with the IRS. When the IRS grants you an installment agreement, you'll still be charged penalties and interest as you pay off your debt. And any refund owed in a future year will automatically be applied to the outstanding debt.
Is an installment agreement the right tax settlement option for you? Call Thomas G. Rex, CPA today at 520-433-9291 or request a consultation to discuss all the options available to pay off your tax debt with the IRS. I can help negotiate an installment agreement and will work with the IRS on your behalf to make sure you get the best deal possible.