Are you struggling to pay your taxes and worried about the IRS? An Installment Agreement may be the right resolution for you.
Installment Agreements are a great resolution for taxpayers who cannot make large payments all at once. These resolutions allow you to pay your tax debt like you would for a house or car. If you decide that an Installment Agreement could work for you, the next step is deciding what you are able to pay each month.
Each tax debt has its own deadline for when the IRS can no longer collect on it based on when the taxes were assessed. If you are closer to the end of the ten year time limit the Internal Revenue Service will probably become more aggressive in its attempts to collect money from you. If the IRS demands a payment plan that you know is not practical, you do NOT need to agree to that plan.
There is a formula that is used in many agreements with the IRS to determine your actual ability to pay. This formula helps set your monthly disposable income. The IRS will use this to help set a realistic monthly amount. There are monthly allowances for many categories that include your typical necessary items such as: car payments, house payments, food, vehicle costs including maintenance and fuel, life insurance, health insurance, etc. Form 433A also asks for any assets such as investments, real estate, and vehicle information such as make, model, mileage, and creditor.
All of these pieces of information help the IRS determine what it thinks you can pay back. And while this is a formula the IRS often follows, do not be surprised if they push back and try to disallow expenses. If you are attempting to set up your own Installment Agreement be prepared to negotiate and explain any expenses they find questionable.
It is important to set an installment agreement that you can pay for the entire period. If you default and are unable to make payments you go back to square one, wiping out any previous work to settle your tax debt!
If not having a lien on your house or property is the most important part of your resolution, an installment agreement will probably not be your best choice. Even if you have agreed to terms that won’t full pay your balance, your old tax debts will continue to collect interest and penalties until they expire. BUT the notices threatening wage garnishments, wage levies, and bank levies will stop with an installment agreement!
If your primary goal is to set up an affordable resolution that will keep the IRS from threatening you with more wage or bank levies, then an installment agreement could be the right resolution for you! To find your best resolution, fill out the confidential consultation request below or call 1-844-806-2648!