If You Owe the IRS, Can You Make Payments?
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.
Can You Have 2 Payment Plans With the IRS?
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.
How Many Payment Plans Can You Have With the IRS?
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.
How to Set up an Installment Agreement With the IRS
To set up an installment agreement, you will need the following information:
- Your most recent tax return
- Your bank routing and account numbers
- Your contact information
- The amount you owe in outstanding taxes
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.
4 Common Types of Payment Plan Installment Agreements
You can request several different IRS installment agreements, depending on the amount of taxes owed and your qualifications.
1. Guaranteed Installment Agreement
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:
- You must have filed all income tax returns and paid taxes for the past five tax years.
- You cannot have entered into an installment payment agreement to pay income tax within the past five years.
- You must be unable to pay taxes in full by the due date.
- You must be able to pay the total balance due within 120 days.
2. Streamlined Installment Agreement
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.
3. Non-Streamlined Installment Agreement
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:
- All current financial assets and property you or your business own
- Amounts owed by you or your business
- Amounts owed to you or your business
- Employment information and wages
- Other income
- Monthly expenses
4. Partial Payment Installment Agreement
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.
Consequences for Evading Payment of Taxes Due
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.
The Benefits of Working With a Tax Lawyer
Working with a tax lawyer at Polston Tax can offer several benefits when dealing with tax issues. Here are some of the primary advantages.
- Legal expertise: Tax law can be confusing. Polston Tax lawyers have specialized legal training and knowledge to help you navigate the complexities of tax law and regulations.
- Representation in court: If your tax issue requires court representation, we can represent you and advocate for your interests.
- Protection of your legal rights: We can help protect your legal rights and ensure the IRS treats you fairly.
- Assistance with tax planning: Additionally, we can help you with tax planning, which can help you minimize your tax liability and avoid future tax problems.
- Effective negotiation: We can also help negotiate with the IRS on your behalf, which can be especially useful if you owe a large tax balance.
- Confidentiality: Attorney-client privilege ensures all your discussions with us are confidential.
- Personalized service: We take a personalized approach to each client, so we will work with you to understand your unique tax situation and develop a customized solution to help you resolve your unpaid taxes.
- Proven track record: We have a proven track record of success in helping clients set up installment agreements with the IRS. Our clients have saved millions of dollars in back taxes thanks to our high success rate.
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.
Contact Us at Polston Tax
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.