Att Installment Agreement

If you owe taxes to the IRS but cannot pay the full amount at once, an IRS installment agreement may be an option for you. An installment agreement allows you to pay off your tax debt over time, rather than in one lump sum.

One type of IRS installment agreement is the “Offer in Compromise,” where you negotiate with the IRS to settle for less than you owe. This option is usually reserved for taxpayers who can demonstrate financial hardship and cannot realistically pay off their entire tax debt.

Another option is the “partial payment installment agreement,” which allows you to pay a reduced monthly payment over an extended period until the statute of limitations for collection expires.

The most common type of installment agreement is the “guaranteed installment agreement,” which is available to taxpayers who owe $10,000 or less and can pay off the debt within three years.

To apply for an installment agreement, you must fill out IRS Form 9465 and submit it along with your tax return or notice of deficiency. The IRS will review your application and let you know if you are approved or denied, and if approved, what your monthly payment amount will be.

It’s important to note that installment agreements come with interest and penalties, so it’s in your best interest to pay off your tax debt as soon as possible. Additionally, failing to make the agreed-upon payments can result in the IRS taking collection action against you, including wage garnishment and seizure of assets.

Overall, an installment agreement with the IRS can be a helpful tool for those who cannot pay off their tax debt immediately. If you’re considering this option, be sure to consult with a tax professional to determine the best course of action for your specific situation.