Missed Installment Agreement Payment? Here Are The Exact Steps You Need To Take

Missing a debt repayment is scary, and this is even more true when the institution you forgot to pay is the IRS. What happens if you missed your installment agreement payment? 

In this article, we’ll walk you through what happens if you miss an installment agreement payment, the consequences, and how to recover. 

What’s An Installment Agreement?

An installment agreement is one of several programs under the Fresh Start Program. In short, an installment agreement is a payment plan to help repay back taxes. 

If you’d like more information on installment plans, check out the following articles:

To learn more about other possible tax relief options, here’s a comprehensive guide on the Fresh Start Program.

3 Benefits Of Being In An Installment Agreement

There are many benefits to having an installment plan with the IRS. Eliminating tax debt is an essential part of taking care of your finances.

1. Peace Of Mind

One of the reasons why payment plans are so popular is because they offer a lot of psychological relief. 

For each month you pay, your tax debt decreases, and this helps many taxpayers feel as if they are getting their finances in order on a monthly basis.

2. Practical

When your tax return comes back and you get a letter from the IRS that you owe back taxes, it’s not always possible to pay it all off at once.

From those who owe a large lump sum to those who have more important priorities on hand, an installment agreement suits many situations.

This way, the IRS still gets its money and the taxpayer isn’t burdened with an obscene amount of debt, interest, and penalties. 

3. Several Options Available

Installment agreements are the program with the maximum amount of flexibility. For instance, the IRS offers both short-term and long-term payment plans, the latter of which has 4 subcategories

Installment plans suit a variety of situations, which is why they’re a popular option for back tax repayment. Once you apply and are approved, the IRS will put you in the plan that best suits your needs.

Benefits Of Staying Compliant With The IRS

While enrolled in the Fresh Start Program, it’s important to keep up to date with payments. This program provides steady support for those in tax debt and offers generous tax relief. 

Staying compliant with the IRS helps you avoid tax debt, interest and penalties. Due to Americans owing over 130 billion to the IRS in back taxes in 2021, it’s in your best interest to avoid charges with compound interest.

As scary as this may sound though, a missed installment agreement payment is possible to amend.

What Happens If You Miss An Installment Agreement Payment?

Life can get in the way. What happens if you miss an installment agreement payment?

There is a 30-day grace period on installment plans. In other words, if you make the payment within a month of your monthly due date, you’re in the clear.

However, if you pass the 30-day grace period without paying your due, the installment agreement can be canceled by the IRS. If you’re in this situation, be sure to contact the IRS as soon as possible.

How To Prevent Defaults If Your Financial Situation Changes?

If your financial situation takes a turn for the worse, notify the IRS immediately. The purpose of the Fresh Start Program is to provide you with tax relief, not make your financial situation worse.

It’s possible to get approved for another Fresh Start Program, such as a currently non-collectible (CNC) or an offer in compromise (OIC).

Check out our free tax consultation to see which Fresh Start Program you qualify for. We’ll analyze your unique situation and determine which tax relief program best suits your needs.

The Takeaway

Owing back taxes is tough, but it doesn’t have to ruin your future. From this quick call, you’ll be able to determine if you qualify for our services.

We help advocate on your behalf to the IRS. We save you stress, time, and money — while providing you with the most optimal resolution. Book your free consultation today.

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