Setting up an installment agreement with the IRS may be a good way to help you pay off your debt with the IRS if you cannot pay the full amount all at once. An installment agreement allows your tax debt to be paid off over time by breaking it down into a series of affordable monthly payments to fit within your budget.
When you enter into an installment agreement with the IRS, you agree to pay your entire taxes owed to the IRS over a period of time. Each month you will send the IRS a check for the agreed monthly installment payment or you can have the payment directly debited from your checking account. The IRS charges a fee to set up the installment agreement. As with other payment options, you’ll first need to file any outstanding back tax returns before applying for this option with the IRS. When the IRS grants you an installment agreement, you'll still be charged penalties and interest as you pay off your debt. And any refund owed in a future year will automatically be applied to the outstanding debt.
The IRS rules vary depending upon how much you owe. If your tax debt is less than fifty thousand dollars, the IRS does not require you to submit a financial analysis of what you can afford to pay. For tax debts over fifty thousand dollars, the IRS requires that you submit Form 433-A which is a very detailed analysis using IRS standards as to what it thinks you can afford to pay each month. This is a very complex form to complete and when the IRS computes what it thinks you can afford to pay, it will show the highest monthly installment amount. A tax resolution specialist understands the ins and outs of the IRS and it's Internal Revenue Manual which can be of immense value to you. This specialist will act as your advocate to insure that the computation of what you can afford to pay reflects the lowest amount allowed by law, which is usually significantly less than the amount computed by the IRS.
Contact Keystone Financial Solutions, P.C. today at 610-594-2601 to discuss all the options available to pay off your tax debt with the IRS. We're focused on helping our clients in the most appropriate way, and can help negotiate an installment agreement and will work with the IRS on your behalf to make sure you get the best deal possible for your individual situation.