What is an Installment Agreement?

One of the IRS Fresh Start Initiative resolutions is an Installment Agreement. These agreements are entered into by the IRS and the taxpayer, who has successfully proven that they cannot repay their current tax bill in full.

An Installment Agreement is essentially a payment plan. It allows a taxpayer to pay an agreed-upon monthly payment each month. These payments go directly to overall tax debt and continue until the taxpayer pays their debt in full.

Is an Installment Agreement Right For You?

Installment Agreements only last for a maximum of six years. If your tax liability is relatively small and monthly payment would be able to eliminate it over six years – an Installment Agreement may be the appropriate resolution for you.

As long as the taxpayer stays current on their monthly payments, the IRS will not use aggressive collection activities such as levies and liens. Also, the balance will no longer accrue failure-to-pay penalties.

Furthermore, you will no longer receive IRS collection letters or be susceptible to penalties. This plan is also a great way of showing the IRS that you are willing to resolve your debt. 

A downside is that the IRS will continue to apply interest to your total debt. You will end up paying more than your original amount. 

How do you Qualify for an Installment Agreement?

To qualify for an Installment Agreement, you must first ensure that you are compliant with the IRS.

The IRS bases your compliance on your current tax filing status. If you have unfiled tax returns, you are not compliant with the IRS, and you are not qualified for an Installment Agreement or any other type of IRS Fresh Start Initiative relief program.

If you need assistance with filing your taxes, please contact a TaxRise specialist at 833-419-RISE (7473). We have a staff of tax preparers who routinely file the most complicated tax returns for businesses and individuals alike.

Once you are up to date with your tax filings, you can submit IRS Form 9465 requesting an Installment Agreement for your current balance.

Can I Qualify for an Installment Agreement on my Own?

Yes, you can qualify for an Installment Agreement without professional representation. However, depending on your balance amount and financial situation, you might be better served working with a professional.

Installment Agreements are often the easiest resolutions to achieve because it guarantees a monthly payment to the IRS. The IRS calculates a monthly payment plan they deem financially reasonable based on information provided by that taxpayer.

The IRS calculates this amount based on several different factors, including the maximum expenses allowable for your specific zip code.

Maximum allowable expenses are not the same as a taxpayer’s actual expenses. So often, a taxpayer will agree that they cannot afford long term.

The Risks of Applying for an Installment Agreement on your Own

Without professional representation, you run the risk of the IRS placing you in a less-than-optimal payment plan. The plan could be too long or the monthly payments too high, increasing your chances of defaulting.

Installment Agreements often come with terms that state that if a taxpayer defaults on their payment, the agreement will become null-and-void, and immediate collection activity such as wage garnishments, levies, and liens will go into effect.

As mentioned above, the IRS prefers to enroll delinquent taxpayers on Installment Agreements. Unlike most other programs through the Fresh Start Initiative, an Installment Agreement allows the IRS to collect as much money as possible from the taxpayer in question.

Nevertheless, an installment agreement is still a valid form of fresh start tax relief, but some taxpayers may qualify for a better tax relief program.  

Why Work With TaxRise To Secure My Installment Agreement?

When you work with TaxRise to secure your Installment Agreement, our tax professionals will work to get you the lowest possible monthly payment.

Reaching a compromise with the IRS for a reasonable monthly payment is difficult. Your chances of making smaller monthly payments are more likely if you use a professional tax relief company to represent you on your behalf.  

TaxRise tax attorneys will work with the IRS on your behalf to achieve the best terms possible for your Installment Agreement. They will not be bullied or tricked, plus they know what terminology and financial documentation the IRS wants.

Our team has reduced monthly payments by over 80%, removed tax liens, lifted wage garnishments and bank levies, all through carefully crafted cases and robust resolutions.

Next Steps

If you’re interested to see if an Installment Agreement is the best for you or if you would like to see if TaxRise can renegotiate your current Installment Agreement, give us a call at 833-419-RISE.

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