Most open IRS cases are closed in one of two ways, the case is either closed via a Hardship Status or an Installment Agreement.
How does the IRS determine how they are going to close your case? By simply completing a Form 433A or Form 433F financial statement from you.
Based on your financial statement and the documentation that goes along with the statement, the IRS will make a determination.
If your case does not fall under the hardship rules, the Installment Agreement will be a payment plan that allows you to pay over a period of time.
The IRS has the right to review the Payment Agreement from time to time but most agreements end with the statue of limitations expiring on the case.
The Streamline Agreement can be obtained quickly. The rule for the Streamline Agreement is that the tax due to the IRS is under $25,000, including all penalties and interest.
Also you must have all your tax returns filed with current withholding tax taken out or estimated tax paid, if applicable. Under the Streamline Agreement the balance must be paid within 60 months or before the statue of limitation time period.
Fresh Start Tax can get these cases resolved immediately. We can usually get a Streamline Agreement set-up within one hour.
One benefit of a Streamline Agreement is that no financial statement is required.
The long term agreement has several names, Installment Agreement or Part Pay Agreement are the most common names.
The IRS requires a completed Form 433A or Form 433F financial statement depending on which division is working the case. The ACS unit requires a 433F and the local or large dollar unit requires a 433A.
These cases are looked over more carefully and require complete documentation. The IRS will require bank statements, pay stubs, copies of all bills and possibly even canceled checks.
The IRS will also follow the National Standards Program which allows a limited amount of expenses per category. It is not recommended that the taxpayer, begin this process with the IRS.
Unless you work with the IRS on these issues it is difficult to determine what they allow and what they do not. A professional can negotiate a better deal. The key in getting a good Part Pay Agreement is packaging. At Fresh Start Tax we are the best at handling this process.
Questions on Installment Agreements – Feel free to email us a question!
If IRS filed a substitute tax return for you, we can help!