IRS Payment Plans and different Options to pay back taxes.

The Internal Revenue Service makes it convenient for taxpayers to pay back taxes. It does not do any one a favor with the penalties and interest they charge however a good tax resolution company should be able to apply for a  abatement of penalties and interest and get you some tax relief if you have a true reasonable cause.

Taxpayers can make monthly payments on their back taxes through a installment agreement. Making payments however does not stop the penalties and interest.

It is best you pay the tax as soon as possible.

Before you make application for a payment agreement make sure you do the following:

1. Make sure all your tax returns are filed and up to date,

2. IRS will ask you if you tried to borrow the money so make sure you have an answer for the agent asking the question. Most taxpayers simply do not have the ability to acquire a loan.

3. Make sure you know how much you want to pay back so the IRS does not talk you in to something you cannot afford.

4. Be familiar with the National Standards Program and how that relates to your income.

5. IRS will ask if your current withholding is adequate to cover this years taxes.

Fee for an installment agreement.
Pay the full amount you owe within 120 days to avoid the fee. If you cannot pay the full amount within 120 days, the fee for setting up an agreement is:

a.    $52 for a direct debit agreement;
b.   $105 for a standard agreement or payroll deduction agreement; or
c.    $43 if your income is below a certain level.

Different types of IRS Payment Plans.

Under $50,000 – IRS Payment Plan

You may apply on line if you owe the IRS less than $50,000 including all penalties and interest. Many times it is beneficial to pay your liability down under the $50,000 mark so the IRS does not need a financial statement. You want to avoid the IRS roaming around your financial affairs.

Over $50,000 – IRS Payment Plan.
If you owe more than $50,000, you will also need to complete Form 433-F, Collection Information Statement (PDF) on our website. You will have to call the IRS and have the 433F completely  documented. A IRS Agent on the other end of the phone line will ask you detailed questions about your financial life so be prepared.

Our recommendation is to have a tax professional involved so you get the agreement you want and not the one IRS will try to shove down your throat.

If you cannot afford a IRS Payment Plan you have two other options. You can:

1.Apply for a tax settlement called an Offer in Compromise or,

2. Apply for a hardship.

You can call us today for a no cost consultation. 1-866-700-1040.