Installment Agreements are the some of the most popular of the IRS’s tax debt payment plans because most taxpayers meet the eligibility criteria for these payment plans. There are various types of Installment Agreements, including Streamlined Installment Agreement, Partial Payment Installment Agreement, and Guaranteed Installment Agreement.
Although each Installment Agreement has different qualifying factors, every Installment Agreement allows taxpayers to pay their tax debt in monthly installments to resolve their back taxes.
Installment Agreements are widely used by taxpayers because they can comfortably resolve their tax debt without lengthy negotiations with the IRS. Since all Installment Agreements except the Partial Payment Installment Agreement do not involve tax debt reduction, they are easier to qualify for.
Taxpayers that have the financial capability to pay their entire tax debt amount if not in a lump sum, then in installments, cannot qualify for tax debt reduction plans. For these taxpayers, Installment Agreements are most appropriate because through them they can comfortably pay back their tax debt over a long duration of time.
There are various kinds of Installment Agreements designed to allow taxpayers with different financial conditions to pay their tax debt. According to the amount of tax debt that needs to be paid, taxpayers can choose the most appropriate Installment Agreement to resolve their tax debt.
Payment of back taxes through Installment Agreements allows taxpayers time to pay back their tax debt. The amount to be paid in monthly installments depends upon the taxes owed and the financial condition of the taxpayer.
Installment Agreements help taxpayers avoid IRS collection actions such as federal tax liens and levies. After qualifying for an Installment Agreement, taxpayers can pay the fixed monthly installment to pay back their tax debt amount over time.