What is an IRS Installment Agreement?

To help people pay off any tax debt, the IRS offers various payment arrangements or payment plans that are subject to certain rules.

An “Installment Agreement” are one of the various payment plans available from the IRS.

An Installment Agreement with the IRS allows taxpayers to pay their back taxes to the IRS through monthly payments. This is a viable option for taxpayers who cannot afford to immediately pay their tax liability in full. There are guidelines regarding how the IRS determines the payment amount and time frame for the agreement. A taxpayer must also be compliant with all past tax filings before establishing the agreement. Depending on the circumstances and the amount of time that the IRS has left to collect the tax debt, the Installment Agreement may pay all or part of the back tax liability.

How to request an installment agreement?

Don’t Try to Go It Alone.

The process isn’t prohibitively challenging but you should still consider consulting with a tax professional who has experience in handling tax debts. It’s important that you understand all your options, and you might need help negotiating the best possible monthly payment with the IRS. The tax professional you choose should know about the laws governing IRS collection of tax debts and how the IRS evaluates installment agreements.

Your specific tax situation will determine which payment options are available to you. Payment options include full payment, short-term payment plan (paying in 120 days or less) or a long-term payment plan (installment agreement) (paying in more than 120 days).

If you need help requesting an installment agreement to help pay your tax debt, please contact us for a free consultation. We can further discuss your current financial status and see what your best options are.

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Andy Yu is the best CPA in Southern California by far. His past experience really shines when presenting our options and creating a strategy in resolving the tax dispute. His insight on the audit process delivered a prompt resolution.

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