The IRS may agree to let you pay your back tax debt off gradually in monthly installments if you cannot pay your tax debt in full.
The IRS may be a difficult and demanding agency to work with, but it is also highly practical and straightforward. The IRS understands that it simply cannot take money that doesn’t exist. If you don't have the money, you can't pay. Allowing taxpayers to pay back tax debt over time can often be the easiest and best way for the IRS to collect all the money it is owed.
Installment plans are great options that work well for both the IRS and the taxpayer. Though you will usually have to pay penalties and interest, setting up a payment plan through successful tax resolution can get you back on a track so that you can become free of your tax debt.
An installment agreement can be either formal or informal. In an informal installment agreement, the taxpayer promises to make monthly payments in an agreed amount which will pay off his balance within two years. A formal installment agreement is a written agreement in which the taxpayer promises to make, and IRS agrees to accept, monthly payments in a specified amount. A taxpayer can allocate payments, such as against the trust fund portion of employment taxes, under an informal installment agreement but not under a formal installment agreement.
The IRS is very reasonable when it comes to accepting an installment plan for back tax debt. Their goal is the same as yours. To move on and put this behind you. Take the first step and let us set up a payment plan that works in your favor. Call us for a free tax consultation at 605-646-3585.
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