Are you having trouble with your IRS tax debt? The burden of a hefty tax bill can be overwhelming, but there’s a solution: Installment Agreements.
Installment agreements, commonly known as IRS payment plans, provide taxpayers with much-needed flexibility in paying off their tax debt.
What are IRS Installment Agreements?
IRS Installment Agreements are structured payment plans that allow taxpayers to settle their tax debt over time rather than in one lump sum. This arrangement offers a more flexible approach, making it easier for individuals and businesses to fulfill their tax obligations without experiencing financial strain.
With an IRS monthly payment plan, taxpayers agree to make regular monthly payments toward their tax debt. However, before you decide to request a payment plan with the IRS, here are some important things to consider:
- Installment Agreements usually require equal monthly payments to the IRS.
- The IRS considers your ability to pay before considering how much you owe when determining your monthly payment amount.
- Interest may be deductible on borrowing sources such as a second mortgage and home equity lines of credit.
- To be granted an installment agreement, you can’t have cash in checking, savings, money market, or brokerage accounts that would be adequate to pay the debt.
Are you eligible for an IRS payment plan?
To qualify for an Installment Agreement, you must meet certain eligibility criteria. Generally, individuals who owe $50,000 or less in combined tax, penalties, and interest may be eligible. If you owe more than this amount, additional documentation and financial disclosures may be required.
What are the types of payment plans available?
The IRS offers different plans so paying your tax debts can be more manageable. Below are the types of payment plans available.
- Streamlined Installment Agreement
Who is eligible for this payment plan?
Individuals, in-business with income tax only, or an out-of-business taxpayer who owes taxes less than $25,000.
What are the terms of this plan?
The proposed payment must fully cover the tax liability within 72 months or by the Collection Statute Expiration Date (CSED), whichever is less.
- In-Business Trust Fund Express Installment Agreement
Who is eligible for this payment plan?
In-business taxpayers who owe taxes less than $25,000.
What are the terms of this plan?
The proposed payment must fully cover the tax liability within 24 months or by the CSED date, whichever is earlier.
- Guaranteed Installment Agreement
Who is eligible for this payment plan?
Individual taxpayers who owe taxes less than $10,000.
Past 5 years of timely filed income tax returns and payments.
No prior installment agreement for income tax.
Agreement to pay in full within 3 years or by the CSED date, whichever is earlier.
Financial inability to pay the full amount when due.
- Partial Payment Installment Agreement (PPIA)
Who is eligible for this payment plan?
Taxpayers who are unable to fully pay their tax debt before the CSED.
What are the terms of this plan?
The taxpayer must complete a financial statement and provide supporting information.
A Notice of Federal Tax Lien determination is required.
The agreement will be subject to future reviews to determine if financial situation has changed.
Can you change your payment plan?
Yes. If you find yourself unable to meet the terms of your current payment plan, our team can assist you in modifying the agreement. It’s crucial to address changes promptly and proactively to avoid potential penalties and interest.
Ready to tackle your IRS tax debt? Call us for a free consultation.
At the law office of Steven N. Klitzner, we have the knowledge and the experience necessary to assist you with setting up installment agreements. Dealing with tax problems can be one of the most stressful times of anyone’s life; don’t handle it alone – you need tax professionals who specialize in tax law and has experience in helping people get rid of their IRS problems.
Here’s what we can do for you:
- Expert in Tax Laws: Our team is composed of seasoned tax experts that can help you simplify the complex tax laws so you can understand and navigate your tax obligations with confidence.
- Thorough Financial Analysis: We conduct comprehensive financial analysis, customizing installment agreements to your unique financial situation, and guarantee realistic and manageable payment plans for you.
- Negotiate Agreement Terms: We can help you optimize and negotiate favorable terms and conditions so that your monthly payments will not only be compliant but also aligned to your financial circumstances.
Contact the office of Steven Klitzner at (305) 564-9199 today to schedule a free and confidential consultation and learn more about how we can help you deal with your tax debt.
Steven N. Klitzner, P.A. is a tax attorney based in Miami, Florida. He has been practicing tax law for over 40 years, and currently holds a 10.0 rating by Avvo. Mr. Klitzner was appointed to the IRS Service Advisory Council in 2021 and is... 
