An Installment Agreement, or payment plan, is an agreement with the IRS to payback your tax debt over a certain number of months. The IRS encourages you to pay the tax debt you owe and file unfiled income taxes as quickly as possible. When an individual or a business is not able to resolve a tax debt immediately, an Installment Agreement becomes a reasonable payment option, especially if they do not qualify for a reasonable offer in compromise.
To be eligible for an installment agreement with the IRS, the last six years of tax returns must be filed to be compliant. There are guidelines regarding how the IRS determines the payment amount and time frame for the agreement, such as the following:
If you owe $10,000 or under, and all returns are filed, and this is the only tax debt issue you have, the IRS guarantees to place you in a payment plan as long as you can pay-off the amortized balance within 36 months. While a taxpayer may be able to setup this up without representation, the taxpayer may not be able to couple this plan with a penalty abatement request and therefore could be paying to the IRS more than they are required. Therefore, it would be good, even if you owe just $5,000 to contact a professional at Platinum Tax Defenders to review your circumstances and determine whether or not their services are warranted.
If you owe between $10,001 and $24,999, and all your returns are filed, you can enter a streamlined payment plan. With this type of payment plan, no collection activity will be taken, interest and penalties will be reduced per month, and the debt can be paid over many months as long as the taxpayer is making payments on time per month. In most cases, no 433-F is needed to enter this plan, however just as above, entering a streamlined plan is great to buy time and protect you from collections, but it doesn’t help with reducing your debt. Therefore, having representation through Platinum Tax Defenders can assist in determining whether this is the best plan and whether you qualify to have your penalties waived.
If you owe between $25,000 and $50,000, and all your returns are filed, you can enter a new streamlined category at the IRS. Under the “fresh start” program, the IRS allows taxpayers to enter this payment plan by completing a 433d and 9465-fs forms, having the payments deducted from their financial institution, and making payments under 72 months. No tax liens are filed under this program, no collection activity is taken, and you qualify for penalty abatement after a few months of working with this program.
If you owe between 50,001 and 99,999, you are considered a high owing taxpayer and therefore to enter a payment plan are required to complete a 433-a, provide much financial disclosure information, and are required to negotiate with the IRS on what your payments can and will be. During this time, a tax lien most likely will be filed against you, but by having Platinum Tax Defenders enter a payment plan, we can protect you from various collection actions.
If you owe over $100,000, your case will be assigned to a Revenue Officer who will request a 433a to be completed and to have supporting documents to verify your income, expenses, and assets. Here at Platinum Tax Defenders, we deal with many Revenue Officers every day. We know how to navigate the maze, protocols, laws, etc. so you don’t have to worry about further wage garnishments, bank levies, or losing property. This is the highest level, and Revenue Officers are relentless at doing a good job in collecting from their assigned taxpayers. Do not try and ignore these people, they will not go away.
If you cannot afford to make monthly payments or do not qualify for an IRS installment agreement, we can help you qualify for another type of tax relief like an offer in compromise or place your account in a “currently not collectible” status so that you will not be required to make payments and the IRS will not pursue collection action.
The IRS’ definition of your living expenses and the “actual” living expenses are normally significantly different. Therefore, here at Platinum Tax Defenders, with your approval, we will negotiate with the IRS to obtain an Installment Agreement that will be the right fit for you.