IRS Payment Plan

IRS Payment Plan And IRS Installment Agreement

There is a lot of information about working out a resolution for an IRS payment plan.  This can make the whole tax settlement/resolution issue scary and confusing.  Believe it or not, the IRS is ready, willing, and able to work with taxpayers to get the best tax settlement for all parties.  Yet sometimes, the information provided by the taxpayer doesn’t add up.  As a result, taxpayers may unknowingly disqualify themselves from an IRS payment plan or IRS installment agreement.

The various payment plans the IRS provides, depends on each individual taxpayer’s situation.  Which is key – your individual situation.  Not everyone gets the same result because, no two situations are alike. Chances are, applying for an IRS tax program is not on the top of your list of fun things to do. Luckily, it is on the top of our list!

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Payment Plans and Tax Debt Relief Companies

When hiring a tax resolution/settlement firm, you should feel that they have your best interests at the heart and, have confidence with their people & process.  Sometimes, it seems nothing is happening on your case but, you must remember, you didn’t get into this situation overnight.  So, allow the tax settlement process to work in your favor and, you might get a tax resolution that amazes you.

Fresh Start Initiative 2017 (Updated 2017)

The IRS came out with a program called the, “Fresh Start Initiative”.  You might have heard about it on television and radio.  What is this and how can it help you? Again, there are several options with this IRS Fresh Start.  Let’s shift our focus over to the various tax payment options you might qualify for.

Streamlined Installment Agreement

IRS Streamlined agreements apply to taxpayers who owe less than $55,000 in back taxes for all years.  Instead of the normal 60 months repayment of tax debt, this program allows you to split up your tax debts into 72 monthly installments.  The IRS may allow you to omit any financial information as a part of this installment agreement.

6 Year Tax Payment Plan (IRS Six-Year Rule)

This option is for taxpayers who owe over $55,000 in back taxes.  Taxpayers must have enough residual income to afford the monthly installments on this IRS payment plan.

IRS One-Year Rule (One Year of Lower Payments) 

The One-Year Rule is for taxpayers who need help within a given year of their IRS payment plan.  This time allows taxpayers to get their expenses under control by, allowing smaller monthly installments during a 12 month period.

Partial Payment Plan

To qualify for IRS Partial Payment Plans, taxpayers must not have residual income or assets. The IRS allows smaller monthly payments which, sometimes results in the taxpayer paying less back tax debt than they owe.

IRS Payment Plan Considerations

Which plan is right for you?  How do you know if you qualify?  That’s is exactly what a good tax settlement firm figures out for you.  A full review of your previous tax filings is the first step.  If you haven’t filed all your tax returns, the IRS will not negotiate.  This makes sense because, how would the IRS know the amount of unpaid taxes you owe?  And how would they negotiate unknown tax debt amounts?

So, if you haven’t filed some years, your first step is to file missing tax returns.  Back taxes can overwhelm the average taxpayer.  So work on one to two years at a time since, since all the paperwork can create confusion.  After submission of all your back tax returns, there will be a waiting period before negotiating IRS payment plans.  The IRS can take several months to process old tax returns due to their heavy workloads.

Remember, as you file past due tax returns, the IRS will be more than happy to send out letters indicating you owe them money.  It is important not to panic.  Work with your tax settlement firmas they should have the experience to handle the IRS letters.

irs payment plan