“Whether you call it an installment agreement, payment agreement, payment option or a payment plan, the idea is the same — you make payments on the tax you owe. That sounds like a good deal, but you can save money by paying the full amount you owe as quickly as possible to minimize the interest and penalties that you’ll be charged. For those who cannot resolve their IRS tax debt immediately, however, an installment agreement can be a reasonable payment option. IRS Installment agreements allow for the full payment of the tax debt in smaller, more manageable amounts.” (We quote this directly from the IRS Website).
ALL IRS PAYMENT PLANS ARE NOT CREATED EQUAL.
Anyone can call the IRS and end up in a payment plan. If you call the IRS and request a payment arrangement, the IRS will dictate to you what the payment plan will be. Most likely, you will accept it because you are frightened, overwhelmed with anxiety and “you just want this to be over”. And that, as they say, “is that”. You are now stuck in an IRS payment arrangement that most likely will fail and you will have more IRS problems in the future. What you don’t know are the following:
- Is the balance of your IRS Tax Debt accurate?
- Can your IRS Tax Debt be reduced further?
- Are you eligible for an IRS Offer in Compromise?
- Can an IRS Penalty Abatement reduce your Tax Debt further?
- How close are you to the Statute of Limitations?
- Can you be declared Currently Uncollectible?
These are some of the pertinent questions that need to be answered before you agree to any IRS Installment Agreement.
DON’T BE BULLIED AND FRIGHTENED INTO ACCEPTING WHAT THE IRS IS OFFERING. IT COULD COST YOU THOUSANDS OF DOLLARS NEEDLESSLY.
What Happens If I Miss an Installment Payment?
Throughout the term of an installment agreement, your payments must be made on time. If you miss by 1 day, you have defaulted. Failure to make timely payments will default your agreement. A default of your installment agreement will cause the filing of a Notice of Federal Tax Lien and/or an IRS Levy action (IRS Wage Garnishment/IRS Bank Levy). If you agreed to an IRS Payment Agreement that was more than you could really afford, you can expect to fail/default.
Q. Will a Notice of Federal Tax Lien be filed on an Installment Agreement?
The IRS generally may still file a Notice of Federal Tax Lien to secure the government’s interest against other creditors. A notice of federal tax lien (IRS Tax Lien) attaches to your personal or real property until final payment is made. The notice filing could have a negative impact on your credit rating. When you call the IRS on your own, while your anxiety level is at an “all time high,” and you are apt to agree to anything the IRS tells you, you will not be told that the IRS will also file an IRS Tax Lien after you made the IRS Payment Arrangement. Now you’re thinking that you just took care of your problem. You have an IRS Install Agreement. Everything is just fine. Don’t be surprised if you find out later on (when you want to purchase a home, re-finance your house, get a credit card or purchase a car), that you find that you have a Federal IRS Tax Lien on your credit.
THE IRS IS NOT YOUR FRIEND. THE IRS IS THE WORLD’S BIGGEST AND MOST POWERFUL COLLECTION AGENCY. THE IRS IS NOT THERE TO GIVE YOU ADVICE. THE IRS EXISTS TO COLLECT AS MUCH MONEY, AS FAST AS THE IRS CAN.
Meeting the Terms of an Installment Agreement
Besides making installment payments on time, the terms of an installment agreement require that all Unfiled Tax Returns required be filed and payments (including any Estimated Tax payments or Federal Tax Deposits) due during the life of the agreement be made timely. If you have Unfiled Tax Returns, FLAT FEE TAX SERVICE
will bring you into IRS Compliance and 9 times out 10 reduce your IRS Tax Debt substantially.
You May Be "Currently Uncollectible"
if you do not have enough income to pay your IRS Tax Debt. This is a method for delaying payment of the debt. Your FLAT FEE TAX SERVICE
Tax Attorney may be able to convince the IRS that you have no way of paying your IRS Tax Debt at this time. In that case, the IRS will consider you to be "currently not collectible."
When you, the taxpayer, are unable to make installment payments and can prove that enforcement of an IRS Wage Levy or IRS Wage Garnishment would create significant undue economic hardship by depriving you, the taxpayer, of basic living necessities the IRS, and some States, will classify the account as currently uncollectible and grant hardship status to suspend collection activity. Usually this is for a period of one year (twelve months) to 18 months.
At the end of the Currently Uncollectible period, you, the taxpayer, will need to show the IRS that your economic situation has not changed. As long as you are "Currently Uncollectable", you will not be expected to pay any of the IRS Tax Debt. Yet, your statutory period (IRS Statute of Limitations) does not freeze; Time continues to pass on your IRS Tax Debt. Proving a Currently Uncollectible status to the IRS is easier said than done, especially for someone who is not familiar with the specific and extremely detailed method the IRS takes to calculate and determine whether or not a taxpayer can make payments and how much they have to pay.
WE, AT FLAT FEE TAX SERVICE, HAVE HELPED MANY TAX PAYERS RECEIVE “CURRENTLY UNCOLLECTIBLE” STATUS