IRS Installment Agreement
An IRS Installment Agreement may be your best option. The process isn't automatic and there may be alternatives, but if you are eligible, this could be the solution that makes paying taxes easier. If you cannot pay the full amount of the tax due and other options such as offer in compromise do not seem viable then you may ask to make monthly installment payments.
You will be charged interest and a late payment tax penalty by the IRS on the tax not paid. Interest rates vary because they are set quarterly.
Before requesting a tax installment agreement from the IRS, you should consider less costly alternatives, such as a bank loan, for example the interest on a bank loan may be less than the combination of penalty and interest on an installment agreement with the IRS.
Partial Pay Installment Agreements
Requesting a partial payment installment agreement with the Internal Revenue Service can be one way to get out of paying all of the debt and it is easier to do and less time-consuming and less expensive than requesting an offer in compromise. In a partial-payment installment agreement, the taxpayer makes regular monthly payments to the IRS, but the payments do not pay off the tax debt in full. After the terms of the installment agreement are fulfilled, or for example, the statute of limitations runs then the remainder of the tax debts are forgiven.
If you are considering a partial pay, it is best to get all your ducks in a row before broaching the subject with the IRS primarily because you will want to use the statute of limitations to get rid of the debt and you do not want the IRS to extend the running of the statute. The IRS may require you to provide detailed financial information prior to agreeing to an installment payment agreement.
The IRS will use this information to determine how much they think you can afford to pay.
Negotiating a monthly installment agreement should be done with an overall game plan in mind. The TaxULess System will help you to understand the complexities of Partial Pay Installment Agreements versus standard Installment Agreements and guide you step by step so you will know which is best for your situation.
Ignoring your tax problems only makes matters worse because your case is progressing through the IRS collect process, unrelentingly, and the sooner you take action the easier the IRS is to work with. If your case progresses to ACS (Automated Collection Services) and beyond then it can be much more difficult to get resolution. Don't hesitate. Sooner is better than later. Take action now.