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IRS Installment Agreements (Payment Plans)

When you owe money to the Internal Revenue Service (IRS) that you are unable to pay in one lump payment, you may be eligible to make regular monthly payments through an installment agreement. If the IRS accepts this agreement, and you make timely monthly payments until you have paid your tax debt in full, you can avoid additional penalties and interest. Additionally, you will no longer be subject to aggressive collection attempts, such as wage garnishments, tax levies, and frozen bank accounts.

To apply for this option, individuals must owe the IRS less than $50,000 and be current with filing all tax returns. Companies applying for an installment agreement cannot owe more than $25,000 in payroll taxes and must also be current with all returns. Both individuals and businesses may qualify for an installment agreement if they owe less than $100,000 and can pay it in 120 days or less. Read on to find out how our unique experience as former revenue officers can benefit you.

Information Required to Apply for an Installment Agreement

You can apply for this option online or over the telephone if you wish to act on your own behalf. Before applying as an individual taxpayer, you will need to have the following information available:

  • Your full legal name and spouse’s name if married
  • Your social security number or Individual Tax ID Number
  • A valid email address
  • The mailing address on your most recently submitted tax return
  • Your most recent filing status

One of the benefits of submitting an online application is that you receive an instant decision without having to wait on hold or for a response to come in the mail.

If you are applying for an installment agreement on behalf of a business, you will need to provide the following data:

  • Your assigned Employer Identification Number (EIN)
  • The month, date, and year you received the EIN
  • The mailing address on your most recently submitted tax return
  • The Caller ID number on your tax delinquency notice

If you are acting as Power of Attorney on behalf of another taxpayer, contact the IRS for additional details you will need to supply in order to submit an application for an installment agreement. This settlement option tends to have a higher acceptance than other types because the IRS ultimately receives all of its money without the need to pursue additional collection efforts.

More Than You Bargain For

Although you may have an idea of what how long you’d like to take to pay off your debt and the amount your monthly payments should be, the IRS is likely to have a different plan – a plan that usually involves higher payments than you anticipate. First, the IRS does not want to take an installment agreement; they would rather have it paid in full in one lump sum. If they do agree to an installment plan, they want as much money from you as possible, and they will look at all options to accomplish this – meaning they want you to potentially liquidate assets to afford higher payments.

A client we recently helped proposed an installment agreement was $1,000 per month, but the IRS counter offered payments of $13,000 each month. We re-proposed an offer of $2,100 per month that was accepted. Negotiation is part of the process you have to go through, and you do not want to do it alone. The IRS may attempt to bully you into payments that are much higher than you can afford. That is why you need an Enrolled Agent with former IRS experience in your corner. Many of our Enrolled Agents previously worked as federal agents and have the expertise and ability to prove to IRS what you qualify for and can knowledgably negotiate the monthly payment plan to something you and the IRS can agree on (and you can afford!).

Let Our Experienced Enrolled Agents Represent You to the IRS

At Yarborough IRS Tax Debt Solutions, helping people find workable and realistic solutions to overwhelming tax debt and working on their behalf with the IRS is all we do. We understand that you may feel confused, frightened, and intimidated because you owe the IRS money you simply do not have available to pay.

Our staff of Enrolled Agents consists mainly of former IRS agents who know how the agency works from the inside. We will work with you to make sure that you meet IRS criteria for an installment agreement and that it’s the most appropriate option for you. Once we have our plan in place, we submit the paperwork for you. Our many decades of combined service working for the IRS means we know how to propose offers on your behalf that the IRS is likely to accept.

You don’t have to go through this alone. Contact our office today for a free consultation to discuss tax payment plans and other options for settling your tax debt with the IRS.