You don’t have to put your life on hold because of tax debt. With an IRS payment plan, you can pay off your taxes and keep moving forward.
Owing the IRS money is never a good feeling, especially if you are unable to pay your taxes. Ignoring your tax debt, however, is not really an option. The IRS will take action to collect the debt through tax liens, tax levies, and/or wage garnishment. Thankfully, there is a solution for tackling your tax debt – an IRS payment plan. With an approved IRS installment agreement, you’ll be able to stretch your payments out over time, giving you the breathing room you need. Depending on your situation, you may qualify for one of the following IRS payment plan options.
This is basically a payment extension, allowing taxpayers to pay the debt within 180 days.
Available to individual taxpayers and businesses. Payments are stretched over 120 days or longer.
If you are approved for a payment plan, additional collection action will not be taken against you, as long as you make your payments on time. Penalties and interest, unfortunately, will still accrue until the debt is paid in full.
Before you can request an IRS payment plan, all of your tax returns must be up to date. Be sure to submit any unfiled tax returns immediately, or your application will be denied. Once your tax returns are complete, you can apply for an IRS payment plan by submitting Form 9465 (Installment Agreement Request) through the mail or by accessing it online. The type of payment plan you request, and the length of your IRS installment agreement, will vary based on the amount you owe.
If your tax debt is below $10,000, the IRS will generally approve your installment agreement request without any significant financial information required. You’ll have up to three years to pay off your taxes, with no set minimum monthly fee.
For balances between $10,000 and $25,000, you’ll have up to six years (72 months) to pay your tax debt, if approved. The monthly payment is equally divided over the length of the agreement.
If your tax debt falls between $25,000 and $50,000, you’ll be required to provide more financial information than those who have lower debt thresholds. The repayment period is 72 months.
For tax debt exceeding $50,000, the IRS will require more detailed information regarding your ability to pay. This includes your assets, investments, bank accounts, and income (Form 433-F). In some instances, you may have to sell your assets to pay down the debt before an agreement is approved. The length of your payment plan and the amount you pay monthly, however, is specific to your case.
At Tax Defense Network, we’ve helped thousands of taxpayers get back on track with an affordable IRS payment plan. Give us a call today to see how easy it is to get started.