INSTALLMENT AGREEMENTS
If you are not able to pay the Internal Revenue Service immediately or within 120 days, you may qualify to pay the IRS through a monthly installment agreement. It is important that you follow all terms of your installment agreement, including making all payments timely, while remaining current and compliant with all current filings and payments. Penalties and interest will continue to accrue while paying off an installment agreement, so it is still in the best interest of the taxpayer to pay off any amount due in full as soon as possible. If you have questions or need help with an installment agreement, call us at 1-800-408-3122 or email us at taxhelp@iowetaxes.com for a free consultation.
What is an installment agreement?
An installment agreement with the Internal Revenue Service is an agreement you make which in most cases will allow you to make regular monthly payments to the IRS to pay back your current debt. While the payments are usually made in equal monthly installments, if you have a good reason for varying your payment amounts, such as having a seasonal business, it is possible to work out an agreement with the IRS that will work around your particular situation. When you are under a valid installment agreement and following all the terms and conditions, you will not need to worry about having your bank accounts or other assets seized.
What if I can’t pay the full amount due even under an installment agreement?
If you can demonstrate to the IRS that you can pay something monthly, but cannot pay the full amount due before the collection statute expiration date, it is still possible to get an installment agreement known as a “partial pay installment agreement”. When you are under a partial pay installment, and following all terms and conditions, you again will not need to worry about having your bank accounts or other assets seized. But be aware, under a partial pay agreement, the IRS may check regularly to see if your financial situation has changed and if you are now able to pay more. You must respond to the IRS questions and follow their procedures in a timely manner, or they can terminate the partial pay agreement and again take levy action against you.
Partial Pay Installment Agreement
If the expiration date for irs collections expires before full payments can be made, you may qualify for a partial pay installment agreement.
Change existing installment agreement
If your situation has changed since getting an installment agreement, you may qualify for a revision of the payment on your existing installment agreement.
Currently Not Collectible
If a taxpayer can show the IRS that they cannot afford to make any payments now, they may qualify for IRS to place the account in a currently not collectible status.
Questions You Might Have
The Internal Revenue Service will allow you to set up an installment agreement online, by telephone or by filling out certain forms. Depending on the amount you owe, you can expect the IRS to ask detailed questions about your income and expenses, as well as bank account information.
You will continue to pay penalties and interest on the outstanding amounts due to the IRS. Because of this, if it is possible for you in your situation, it is usually better to find other sources to pay the IRS in full. In any event it is in your best interest to pay the debt in full as soon as possible to minimize penalties and interest you pay.
The Internal Revenue Service can still file a lien against property you own, so that they can secure their interest in your property against other creditors.
Under normal situations, the IRS will not normally levy your bank accounts when you are following the terms of a valid installment agreement you have in place with the IRS. It is very important that you follow the terms of the agreement once you have one in place, and be in contact with the IRS if for any reason you are unable to timely make a payment.
The Internal Revenue Service will accept payment by checks and money order as well as by credit card. The method the IRS prefers is to set up a direct debit from your bank account.
If you miss a payment with the IRS, you may receive a notice that the Internal Revenue Service plans to terminate your installment agreement and levy your assets. It is therefore in your best interests to immediately contact the IRS in an effort to make things right as soon as possible and keep your installment agreement in place.
If you miss a payment the IRS can terminate your installment agreement. They can also terminate your agreement if you fail to file your current return timely, or fail to pay your current obligations. It is therefore very important to stay current and compliant with the Internal Revenue Service, especially when you have an installment agreement in place.
If your installment agreement with the Internal Revenue Service is terminated, you have thirty days to appeal. You will still have an opportunity to request a reinstatement after that. If your appeal is rejected, it is still possible to appeal the rejection through the Collection Appeals Program.
Call us at 1-800-408-3122 or you can email us at taxhelp@iowetaxes.com for a free, no obligation consultation.