Payment Plans: Part I

An installment agreement, or payment plan, is a concurrence with the IRS to reimburse your tax debt over an assured number of months. The IRS promotes you to pay the tax debt you owe and file unfiled income taxes ASAP. When an individual or a business is not able to resolve a tax debt at once, an installment agreement becomes a practical payment choice, particularly if they don’t meet the criteria for an OIC. To be entitled to an installment agreement, the last six years of tax returns should be filed to be amenable. There are guidelines concerning how the IRS concludes the payment amount and time frame for the agreement, such as the following:


1. If you owe $10,000 or under, and all returns are filed, and this is the only tax debt relief issue you have, the IRS guarantees to place you in a payment plan as long as you can pay the balance within 3 years. While a taxpayer might be able to situate this without representation, they might not be capable of coupling this plan with a penalty abatement request, and could therefore pay the IRS more than entailed. If would be best to hire a tax debt relief company when this happens to you. You need adequate representation against the IRS.

2. If you owe between $10,001 and $24,999, and all your returns are filed, you can enter a streamlined payment plan. This type of payment plan, no assortment activity will be taken, interest and penalties will be reduced each month, and tax debt relief can be achieved over several months as long as the taxpayer is making payments on time per month. Usually, no 433-F is needed to enter this plan, nonetheless just as above, entering a streamlined plan is great to buy time and protect you from collections, but it doesn’t help with reducing your debt. This is where a tax debt relief company can help you. If you don’t know where to start, click here.