Dealing with the Internal Revenue Service can be stressful, especially if you owe back taxes and are struggling to make payments. One option for resolving your tax liability is to set up an installment agreement that allows you to pay off your balance over time.
But what happens if you have multiple tax balances? You may wonder whether you can have two or more installment agreements with the IRS. To help you navigate this situation, we will explore this question and provide some guidance.
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If you owe the IRS, you can set up a payment plan, also known as an installment agreement, to make payments over time. Having a payment plan with the IRS can help you avoid more serious consequences, such as wage garnishment or bank account levies.
To set up a payment plan, you can apply online using the IRS Online Payment Agreement tool or fill out Form 9465 and mail it to the IRS. The IRS will review your application and may ask for additional information about your financial situation to determine your eligibility for a payment plan and assess how much you’ll pay each month.
Remember, interest and penalties will continue to accrue on your tax balance until you pay in full. You may also need to pay a setup fee or other costs associated with the payment plan. Additionally, if you fail to make your payments on time or default on the payment plan, the IRS may take collection action against you, including levying your bank accounts and wages.
If it is challenging to pay off your taxes, work with a tax professional or a reputable tax resolution firm like Polston Tax to explore your options. Resolving your unpaid tax issues may include negotiating with the IRS to set up an installment agreement, seeking legal advice or exploring other options such as an offer in compromise or currently not collectible status.
Typically, the IRS does not allow taxpayers to have two separate installment agreements simultaneously, because an installment agreement is a legally binding arrangement between the taxpayer and the IRS to pay off a specific tax liability over a given period.
If you have multiple tax balances, the IRS may allow you to include all your unpaid taxes in a single installment agreement. Alternatively, you may be able to pay off one balance at a time through a series of installments. However, to do this, you must demonstrate that you are making a good-faith effort to pay off your unpaid taxes and that you can’t pay your taxes owed in full.
If you default on an installment agreement, the IRS may take collection action against you. Additionally, interest and penalties will continue to accrue on your tax balance until you pay it off.
If you have multiple tax balances, work with a tax professional at Polston Tax to explore your options for resolving them. That may include negotiating with the IRS to consolidate your balances into a single installment agreement or exploring other options for eliminating your tax liability, such as an offer in compromise or a partial payment installment agreement.
The IRS typically only allows taxpayers to have one active payment plan at a time. If you have multiple tax balances, you may be able to consolidate them into a single payment plan by contacting the IRS and negotiating a new installment agreement that includes all your outstanding tax liabilities.
To set up an installment agreement, you will need the following information:
You can apply online for a payment plan if your tax balance is less than $50,000, including penalties and interest. Count on Polston Tax to help you set up an installment agreement with the IRS.
You can request several different IRS installment agreements, depending on the amount of taxes owed and your qualifications.
If you owe a maximum of $10,000, you may be eligible for a short-term payment plan called a guaranteed installment agreement if you meet the following criteria:
If you owe $50,000 or less in taxes plus tax penalties and interest, you may be eligible for a streamlined installment agreement. To qualify, you must be able to pay the outstanding balance plus penalties and interest within 72 months.
In some cases, you may require a long-term payment plan, such as the non-streamlined installment agreement. Unlike with the other installment agreements, you must additionally complete Form 433-F, which provides the following information to the IRS:
If you cannot repay the installment balance within 72 months, you will need to contact the IRS to make payment arrangements. A partial payment installment agreement allows you to pay off your balance in monthly installments, based on what you can afford after essential living expenses.
To qualify for a partial payment installment agreement, you must prove financial hardship, which could mean gathering supporting documents and bills. After the IRS reviews the document, you may have to sell some of your assets to resolve a portion of the liability.
When you contact us at Polston Tax, we can discuss your options for paying your unpaid taxes.
If you do not arrange to pay overdue taxes, the IRS will initiate the collection process. The IRS can press charges, put a federal tax lien on your assets and property to secure repayment of taxes owed, garnish your wages or place a tax levy to seize and liquidate your accounts at all financial institutions.
At Polston Tax, we may be able to help you avoid civil and criminal penalties. Reach out to us today to learn more about what we can do for you.
Working with a tax lawyer at Polston Tax can offer several benefits when dealing with tax issues. Here are some of the primary advantages.
If you are facing a complex tax issue or need legal representation in court, working with us at Polston Tax may be your best option.
Polston Tax is a tax resolution firm specializing in helping individuals and businesses with tax issues, including setting up installment agreements with the IRS.
Working with a reputable tax resolution firm like Polston Tax can help you take control of your back taxes and avoid serious consequences, such as wage garnishment or bank account levies. If you have issues with unpaid taxes, work with us to explore your options for resolving your tax issues.
We offer a free consultation to help you understand your options for resolving your tax balance. During the consultation, you can ask questions, get advice and learn more about how we can help you. If you owe back taxes to the IRS, contact a Polston Tax lawyer to protect your rights and help you negotiate an affordable repayment plan.
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