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Types of IRS Installment Agreements

November 5, 2013

Installment Agreements are IRS payment plans that allow taxpayers to pay their tax debt in installments. There are various types of Installment Agreements, including Non-Disclosure Installment Plans and Partial Payment Plans. Every Installment Agreement plan has different qualifying factors. Let us take a look at some of the popular Installment Agreements.

Non-Disclosure Installment Agreement
Taxpayers that owe $25,000 or less in tax debt can resolve their back taxes through a Non-Disclosure Installment Agreement. Under this payment plan, taxpayers can pay the amount of the tax debt in installments without sharing their extensive financial details. The amount of payment to be made in monthly installments is calculated by dividing the total tax debt by the number of months required to pay it back. The maximum term for paying the debt under this payment plan is 72 months.

Taxpayers that cannot pay their tax debt in a single payment and owe $25,000 or less in back taxes can use the Non-Disclosure Installment Agreement to achieve a simple resolution.

Fresh Start Streamlined Installment Agreements
Under the Fresh Start initiative, the IRS has introduced flexibility in Installment Agreements. For the Streamlined Installment Agreement, the IRS has increased the maximum dollar criteria from $25,000 to $50,000, and increased the maximum term for debt payment from 60 months to 72 months.

Taxpayers that apply for the Streamlined Installment Agreement do not need to share a financial statement with the IRS, but they may need to share certain financial information during the resolution process. There are two kinds of Streamlined Installment Agreement: one for those owing $25,000 or less, and the other for those owing $25,001 to $50,000.

Partial Payment Installment Agreement
Under Installment Agreement, taxpayers do not necessarily need to pay the entire amount of tax debt. Partial Payment Installment Agreement provides taxpayers a way to get their tax debt amount reduced so that they can pay the balance and resolve their debt.

Installment Agreements are a popular method of tax debt resolution because many taxpayers fulfill their eligibility criteria. Taxpayers must choose the correct Installment Agreement to pay their tax debt for successful and early resolution of tax debt.

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