IRS approves a program in the USA which is known as Installment agreements; it allows the people to pay the debt of the taxes in monthly installments. It is on the individual whether to pay the full amount or make the small payments each passing month to pay off the tax debt. The installment agreements make it easier for the individuals to pay off the debts which they are not able to afford instantly. It becomes convenient to pay it off with the monthly compensation to pay off the debt for IRS.
IRS is concerned with receiving its money so as long as you are paying it off monthly, they are satisfied with the process. Here are some of the things which you need to know about the installment agreements before you think of applying in the process.
Things to know about Installment Agreements
There are certain types of installment agreements which you can available with the IRS and here the conditions for it.
If you owe IRS less than $10,000, it will automatically set you up for this type of installment agreement. You would fall into this category if you were not able to pay the taxes in the past five years. When you have filed the taxes on each tax filing season and by looking at your earning, you should be able to pay off the debt within 36 months. You will be eligible for it when you agree in paying off the debt on time monthly and when the installments are over, you will pay the taxes on the regular basis. If you wish to pay off the debt before 36 months, there is no penalty for it, and you can pay it off instantly when you have the total amount. You will not get charged with the tax lien with getting the installment agreement plan with IRS. If you get hit by the tax lien, then your credit history shows negative which is not good for your standing in the US so with this, IRS gives you the protection from the tax lien through the installments option. When you can meet the criteria, IRS analyzes itself and allows you to be eligible for this category.
If you fall into the category of $50,000 or less for the balance which you owe to IRS, then you are eligible for streamlined agreements. It allows the individuals to pay off the debt within 72 months or less. You can pay it off completely at once too without any penalty. You do need to file the taxes in the previous years and promise to pay the taxes once you get done with the installments. You have to pay the installments on time without any delay, and you will be saved from the tax lien through this category as well. After analyzing your financial situation, IRS will be able to detect where you fall and you will be eligible for this category.
This agreement is flexible for the individuals to pay as much as they can according to their earnings on a monthly basis. IRS analyzes the payout of the individual, and even if you can pay $5 monthly, you can do that with this category. You will have to fill the form of 433-F along with submitting the financial sheet of past three years to IRS for the records. You will also be liable for the tax lien which keeps the protective shield for IRS. Along with all these, necessary documents like pay stubs, bank statements and more will need to be submitted to IRS to be eligible for this category.
If you are not sure what you need to do regarding the installment agreements, then refer to the tax preparer who has all the necessary information and provide you up to date information from the IRS. There are changes which occur with IRS over the seasons, and you will not get to know if you do not have a professional tax preparer by your side. So before you think that there is no way out to pay the debt to IRS, prefer to refer to the tax preparer to get all the help and information.
If you like to meet Carlos Samaniego, EA for local in a personal interview and schedule a FREE "Tax Debt Settlement Analysis" book an appointment at HealthcareTaxAdvisor.com or call direct 909.570.1103