Tax Debt Payment Plan
Debt of any kind can be burdensome, but tax debt has a tendency to scare clients more than any other type of debt. Why? Three words: Internal Revenue Service. Most people have a secret fear of being audited by the IRS as a result of past due income taxes. However, the truth is that instead of being intimidated by the IRS, you can actually turn to them for tax help. The IRS offers some tax debt payment strategies to help you overcome your overall debt, and our office is experienced at negotiating excellent repayment plans.
An IRS Installment Agreement – What is it and How Does it Work?
Because the IRS usually tries to get “delinquent” tax payers back into the system, they tend to grant an installment agreement to individuals who qualify. The installment agreement allows you to make monthly payments against your IRS tax debt over a certain time period (usually 5 years or so). However, bear in mind that before they can grant your request for an IRS installment payment plan, you have to file any past tax returns that you may have neglected.
You can apply for the installment agreement by filling out and attaching the appropriate form (9465) to the front of your tax return. You will most likely need to specify the amount of your requested monthly payment as well as the date you will begin making your installments each month. It’s also extremely important for you to ensure you are able to make your payments on time.
The IRS usually charges a $43 fee for setting up an installment agreement. Some of the other costs you should be aware of include interest and late payment penalty charges on overdue taxes. The best way to avoid incurring any extra fees is to file your tax return in a timely manner. Once you have filed, the IRS will typically work with you to resolve payment issues.
Our firm assist clients in setting up a payment plan by reviewing a client’s budget and using that budget to negotiate an affordable monthly payment plan with the IRS or Franchise Tax Board.