The IRS Installment Agreement – What You Need to Know
One of the main functions of the IRS is to assess and collect all federal income taxes due. The IRS has substantial authority and power that was given to it by Congress to carry out its goals. With these powers and the substantial financial resources that have been assigned, the IRS is essentially the world's largest and most powerful collection agency.
However, the IRS cannot unjustly harass taxpayers or create any unreasonable financial hardship during the collection process. The agency most work within the framework with which Congress has designated. Within this framework there are several programs that assist taxpayers with back tax issues.
One of the most popular programs is the IRS Installment Agreement. This program allows the IRS to establish a monthly payment plan with the taxpayer that is based on the taxpayer's tax liability and how much they can afford to pay in monthly installments.
When establishing an IRS installment agreement, the IRS may require disclosure of the taxpayer's financial position. There are also other conditions that must be kept once the IRS installment agreement is established such as being compliant with future income tax filings and making timely tax payments.
If the taxpayer cannot pay his or her entire tax liability and does not qualify for an offer in compromise or a currently not collectible status, an installment agreement may be the next best choice. If the balance that is owed is less than $25,000 the process becomes a lot easier and the IRS generally has a great willingness to get it completed.
The agency will only enter into an IRS installment agreement once the taxpayer has filed all of his or her necessary federal income tax returns. Depending on the situation, the IRS may file a Notice of Federal Tax Lien to protect the interest until the tax liability is paid in full.
Dealing with the IRS can be a challenge for the individual taxpayer. Often, it is in the taxpayer's best interest to get help from a CPA or an experienced tax lawyer to ensure they get the best possible relief to their IRS tax problems.
Additional Information:If you would like a FREE analysis to determine if you qualify for an IRS installment agreement or if you are just looking for additional information, please visit our site at IRS Installment Agreement.This article is for informational purposes only and is not meant to be tax or legal advice. Each situation is different and you must discuss your cancellation of debt issue with a qualified tax or legal professional. This article is not written to be used for the purpose of avoiding penalties under the Internal Revenue Code.
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