Installment Agreements: "IRS Payment Plans"
Radha Rothrock is a tax lawyer in Cape Coral, Fort Myers, and Naples who handles IRS installment agreements. An installment agreement allows the taxpayer to pay back the tax debt over a period of time. In essence, an installment agreement is a payment plan with the IRS. If the IRS accepts your installment agreement, it will usually release the IRS levy on your bank account or employer's wage order. There are several different types of installment agreements.
Types of Installment Agreements
1. Guaranteed Installment Agreement - This is the simplest type of Installment Agreement and is for taxpayers who owe $10k or less in taxes. No financial disclosure is required.
2. Streamlined Installment Agreement is intended for taxpayers that have tax debt of $50,000.00 or less It is deemed "Streamlined" because the taxpayer is not required to submit a Form 433 with the request. Form 433 is a financial disclosure form.
3. Financially Verified Installment Agreement -
If you owe over $50,000.00, or you can't make the minimum monthly payment on
a Streamlined Installment Agreement, you can file a financially verified installment agreement. It requires you to fill out Form 433 to fully verify your financial situation. The amount of money you pay is calculated on a formula of your income and expenses as well as allowed expenses by the IRS.
4. Installment Agreement Over $100,000
If you owe over 100k, then you need a longer term installment agreement. Sometimes in this case, the IRS will require you to sell off assets to satisfy some of your debt before agreeing to an installment plan.
5. Partial Payment Installment Agreement -
If part of your IRS debt is uncollectible because of the statute of limitations, you might be able to pay off the portion of the debt no subject to the statute of limitations through an installment agreememt.
6. In-Business Trust Fund Installment Agreements - This is an
installment agreement generally for unpaid trust fund taxes, which are payroll taxes. With the Fresh start program in 2012, the IRS now will allow businesses who owe up to $25,000 in 941 payroll taxes to setup a payment plan without any financials (asset, liabilities etc) needing to be verified as long as the business agrees to pay the amount through a checking or savings account monthly. Furthermore, the IRS will waive the need for a lien to be filed as well.
With all types of Installment Agreements, must submit form 9465, the "Installment Agreement
Request," as part of the process of requesting an IRS Installment Agreement. If
you owe less than $50,000 including penalties and interest you can use the Online Payment Agreement application on the IRS's website. If you are requesting an installment agreement of more than $50,000 of tax liability, you must submit a Form 433, as well.