Exploring Installment Agreements as a Tax Resolution Option

Exploring IRS Installment Agreements as a Tax Resolution Option

Overview of Installment Agreements

An installment agreement serves as a viable tax resolution alternative for individuals who do not qualify for an Offer In Compromise. This solution enables taxpayers to settle their entire debt by making monthly payments over a specified period. 

Depending on your financial circumstances, you may qualify for a 'Partial Pay' Installment Agreement.

Woman worried about Tax Identity Theft at her desk

Benefits of "Currently Not Collectible" Status

When your account is designated as “Currently Not Collectible” (CNC), the IRS acknowledges your financial constraints and refrains from pursuing collection efforts or seizing your assets and income.

49771584 2203083406571052 2100091346768363520 n

Financial Evaluation for Eligibility

To determine eligibility, the IRS requires financial substantiation, including a detailed statement of your income and expenses. Based on this information, the IRS assesses whether a reduction in your total tax debt is possible. 

The remaining debt is then paid through manageable monthly installments. Alternatively, the IRS may place your account under a "Currently Not Collectible" status, acknowledging your inability to cover both taxes and reasonable living expenses. During this status, the IRS refrains from collection attempts or asset levies.

FAQs

It's a plan that allows taxpayers to pay their outstanding taxes in smaller, more manageable amounts over time.
Most taxpayers who cannot pay their tax debt in full immediately are eligible, but specific requirements must be met.
You can apply online, by phone, or by mailing a completed Form 9465 to the IRS.

The IRS considers your ability to pay, income, expenses, and asset equity to determine if the offered amount is the most they can expect to collect within a reasonable time.

They include Guaranteed, Streamlined, Partial Payment, and Non-Streamlined Installment Agreements.
Yes, there are setup fees, which vary depending on the type of agreement and method of payment.
Generally, the IRS will not take enforced collection actions while an Installment Agreement is in place.
Interest and late-payment penalties continue to accrue until the full amount is paid.
Yes, you can request modifications or terminate the agreement, but this can lead to enforced collection actions by the IRS.

Important Terms To Know

Seeking Relief: Trust Fund Penalty and Abatement Assistance

At IRSProb.com, we specialize in handling Installment Agreement requests. Whether you’re seeking to initiate a new agreement or facing challenges in fulfilling an existing one, our experts are here to guide you through the process and find the best resolution for your unique situation.

Have a tax question?