IRS Installment Agreement
Before discussion over the matter in relation to IRS installment agreement, we first of all try to understand what is IRS . IRS is the abbreviated term for Internal Revenue Service. This organization is the oldest and most powerful enforcement agency in United States. It is responsible for collection of taxes and enforcement of internal laws. IRS has been provided with vast powers by the government of United States and is very particular in emphasizing the people to meet their tax obligations in the form of filing their tax returns in time and must follow its accuracy.
Wherever applicable it has also disbursed the amount in refunds. In order to check the accuracy of the returns, this organization has made mandatory for all the institutions (those paying interests) to send them computerized sheets of their income which they have earned through interests. Where it appears to the IRS that returns have discrepancies, they hold face to face meeting with the defaulters for audit purpose. In other discrepancies it send notices to the defaulters . Content of the notice is for filing of tax returns along with tax amount and in default, to face penalty along with interest. If taxpayer refuse to pay tax amount , IRS can initiate more severe action.
What is IRS Installment Agreement and its time period?
Against tax payer defaulters IRS provides various modes to settle their tax debts and one of the mode is Installment agreement. In this type of agreement IRS allows payment of debt on installment basis and the amount to be paid in installments are manageable. Time period for the payment of installment has been raised from 60 months to 72 months to the maximum. This agreement also carries with it interest rate and penalties. The longer time you take in clearing your installments the more penalties and interest you have to pay. If you face any difficulty in relation to installment agreements our qualified tax attorneys are always available to negotiate on your behalf with IRS.
Installment agreement is used when one cannot pay his taxes in full nor one received loan from the bank or other financial institutions at the interest rate lower than the IRS . Interest rates of IRS usually fluctuates.
What are the different types of Installment Agreements?
Installment Agreements can be classified into different groups:-
Guaranteed Installment Agreement : This is the easiest mode to obtain installment agreement. This installment agreement is guaranteed till you meet the requirement set forth by the IRS. Concerned requirements are as given below:
- This is applicable to those taxpayers whose owes $10,000..
- In due time tax payer is not able to pay the debt.
- 3 years period is provided for the payment of tax liability.
- Minimum amount is required to be paid by the tax payer.
In this process of payment federal tax lien is not filed by the IRS against the tax payer.
Partial Payment Installment Agreement : In this form of installment agreement the tax payer is allowed to pay less than the total amount owe over agreed period of time. For making payment under this type of installment agreement ,tax payer will have to complete financial statement in the form 433-F, which deals with reporting of income and expenses of living. Thereafter IRS will review the whole details and if it appears to the IRS that taxpayer has some other property which can be sold of to fulfillment of tax debt , he can be called, for providing additional It is to noted that if this form of installment agreement has been approved, tax payer will have to appear before IRS for his financial review in every two year. This review can result in either termination of the agreement or increase in the tax obligations.
Non- Streamlined Installment Agreement: In availing this installment agreement following conditions are be fulfilled:
- If you are in debt to IRS to the tune of $25000 or more and you are able to pay monthly payment to this federal agency, non-streamlined installment agreement is the best option.
- Form 433-F , which is called as Collection Information Statement is required to be filled by the taxpayer . It is important to mention here that IRS will not automatically approve this type of agreement, but you have to negotiate with IRS. Collection Information Statement (Form 433-F) collects information about debts, living expenses, accounts, income and allows the taxpayer for proposal for the payment plan.
- What ever information has been provided by the taxpayer in the Collection Information Report, IRS thoroughly checks it from variable sources before approving the proposed plan. It can even lift its feet back if it appears to the IRS that the taxpayer has provided wrong information or his most of his expenses are unnecessary.
If it appears to taxpayer that payment of tax liability through non-streamlined installment agreement is not possible, they can seek the services of best professional San Diego IRS tax attorneys through us and they are always be shown the right path.
- Direct Debit Installment Agreement: Under this installment agreement debt amount can be directly withdrawn from tax payee’s bank account. This type of installment agreement is generally provided to the taxpayer whose amount payment liability is $25000 or less.
- Verified Financial Installment Agreement: Due to more paperwork this form of installment agreement is very difficult to This agreement is for the tax payer who owes more than $25000 as debt amount and are not willing to pay via direct debit. This installment agreement is generally best for the taxpayers who owes more than $50,000 and agreed to pay via direct debit. This agreement is also best for taxpayers who are unable to pay agreed amount on the basis of stream lined installment agreement.
Can IRS put a tax lien on property in case of installment agreements?
It is important to note that IRS can put tax lien on your property during installment agreement period in order to secure themselves in relation to the payment, which you have to pay them as per agreement.
What happens if someone fails to pay or miss any installment agreement payment?
If you fail to pay any installment in particular month, Federal tax levy will issue you notice in letter number 523. And it will also make your impression negative before IRS, as you have failed to comply with the terms of the agreement and can leave you in financial difficulties.
What is the time period of appeal when IRS rejects installment agreement?
If your installment agreement is not accepted by IRS, you can make appeal with in 30 days of rejection.
If anyone of you are facing any tax related problems our team of qualified tax relief attorneys are always available for your help. You are completely safe with our team. We will negotiate on your behalf with IRS in dealing with installment agreement.