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IRS Installment Agreements

Each year, many Americans are unable to pay their taxes in full. Whether you are a contractor who didn’t put enough money aside or had an unexpected emergency that caused you to dip into your savings, there are a number of factors that can cause taxpayers to come up short at tax season.

If you find yourself unable to pay your tax bill, you may be able to negotiate a payment plan with the IRS. Setting up an IRS installment agreement is the best way to avoid the harsh penalties associated with an outstanding tax bill. At Morgan Sebastian Law, PC, our attorney helps you determine how to resolve your tax obligations and if an installment agreement is your best option.

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Legal problems rarely age well. If you anticipate difficulties paying your tax bill, it’s essential to get on top of the situation in a timely manner. While it can be tempting to let stress get the best of you, it will only worsen the matter by increasing your tax bill and exposing you to significant late penalties and interest. Working with our skilled tax attorney is the best way to deal with the IRS and enter the most ideal installment agreement for your financial situation.

How Do IRS Installment Agreements Work In California?

The IRS knows that some taxpayers won’t be able to pay their tax bills by the deadline. So, to encourage people to pay their bills even if they can’t make the deadline, they’ve created installment agreements. Similar to a loan, installment agreements allow taxpayers to pay off their bills by making multiple payments over a set time frame.

Both taxpayers and the IRS benefit from these plans; installment agreements increase compliance among taxpayers and taxpayers can enroll in an installment agreement to avoid tax liens and other burdensome consequences. However, it is important to note that tax bills that are paid through an installment agreement are typically subject to penalties and interest.

What Are The Different Types Of Installment Agreements?

The IRS offers a variety of repayment plans. The plan that is best for you will depend on your financial situation, how much you owe and how long you anticipate needing to pay off your debt. Some plans offer fewer penalties and interest in exchange for a shorter repayment period while others allow you to spread out payments over a longer time frame but include higher interest and fees. Some of the installment agreements offered by the IRS include:

  • Guaranteed installment agreements. Individuals who owe less than $10,000 and can commit to paying off their debt within three years are eligible for a guaranteed installment agreement. In this agreement, taxpayers must pay their tax bills in 36 monthly payments. The large majority of taxpayers use this payment option for repayment
  • Non-streamlined installment agreements. Taxpayers who owe more than $50,000 can apply for a non-streamlined installment agreement. To qualify for this agreement, individuals must provide the IRS with financial information related to their income, assets and debts. The IRS will review this information and make sure the taxpayer does not have any assets or income that can be used to pay down the debt. If approved, the taxpayer must repay their tax debt within the statute of limitations (10 years).

Ultimately, the best plan for you will depend on a variety of factors related to your finances. Working with a skilled tax attorney is the best way to ensure you enter the best installment agreement for your situation.

Choose Morgan Sebastian Law, PC, For Help With Your Tax Bill

Are you worried about paying your tax bill before the deadline? If so, you may want to consider applying for an installment agreement with the IRS. A payment plan can help you avoid levies, wage garnishments and other forced collection actions. Working with a skilled tax attorney is the best way to ensure you enter the installment agreement best for your financial situation.

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To schedule a consultation with an experienced tax resolution lawyer, call (877) 223-6605 or fill out our online contact form.