Small businesses that owe payroll taxes to the IRS can use an In-Business Trust Fund Express Installment Agreement (IBTF-Express IA) to resolve their tax debt. Small businesses that qualify for the agreement are not required to go through financial verification that would include sharing a financial statement.
Only small businesses that owe $25,000 or less in payroll taxes can apply for an IBTF-Express IA. If the tax debt exceeds $25,000, a payment of the excess amount can be made to fulfill the eligibility criteria for this agreement. Some of the other eligibility requirements are:
- The entire tax debt is required to be fulfilled within 24 months or before the Collection Statute Expiration Date (CSED), whichever is earlier.
- If the tax debt is between $10,000 and $25,000, the business will need to enroll in a Direct Debit Installment Agreement (DDIA).
- The business must have employees when applying for the agreement.
Compliance with all filing requirements of the IRS is also required to successfully apply for IBTF-Express IA. As the agreement allows the payment of back taxes in installments without a detailed review of the business’ finances, it removes complexity.
A request for an IBTF-Express IA can be made by directly contacting the IRS, but it is advisable to consult with tax professionals before anyone submits an application for an IRS program. A professional tax service explores all options and helps small-business owners choose a program that provides the most benefits.
Businesses that owe much more than $25,000 and cannot pay the entire amount in a single payment should explore other IRS tax debt payment plans, such as a Partial Payment Installment Agreement or an Offer in Compromise, to resolve their back taxes.