The Internal Revenue Service has online applications to enter a payment plan to pay your tax obligations. Depending on your particular tax situation, you might have several options, including a short-term agreement, in which you pay your taxes in 120 days or less, or a long-term agreement, under which you take more than 120 days to pay. Each of these options has different requirements. You can apply online for these plans if you meet those requirements, which include:
- For a long term agreement, you must owe $50,000 or less in combined tax, penalties and interest, and you must have filed all required returns.
- For a short term agreement, you must owe less than $100,000 in combined tax, penalties and interest.
How Can a Payment Plan Help Me?
If you are able to enter a payment plan, you can make regular monthly payments instead of paying the entire amount at one time. You can apply online, by phone or by completing and mailing Form 9465. If you owe more than $50,000, there are additional steps to be completed, including a Form 433-F, that will require you to provide considerably more financial information before a payment plan can be approved.
For many payment plan options, you can choose how much you are able to pay each month. While the IRS will attempt to get you to agree to the largest monthly payment they can, you can select your payment amount. However, if you fail to select an amount, or select an amount that is too low, the IRS will simply take the amount you owe and divide it by 72, and that amount will be your monthly payment. Depending upon the plan and payment method you select, there may be as little as no fees or as much as more than $100 to set up a payment plan. This is in addition to penalties and interest.
Do I Need an Attorney to Enter a Payment Plan?
If you owe less than $10,000 to the IRS, installment payment plans generally are automatically approved as long as you agree to pay your tax debt in three years or less. For amounts larger than that, approval is not guaranteed. For larger amounts of tax debt, even though payment plans are available, their approval is at the discretion of the IRS. If you fall into this latter category and owe more than $10,000 in taxes, obtaining approval of a payment plan on your own might be difficult, and you might not be able to obtain the best terms possible.
If You Owe the IRS and are Attempting to Reach a Payment Plan in the Atlanta or Marietta Areas, You Should Contact Tax Attorney Jeff Cohen, Attorney at Law
If you owe back taxes to the IRS and are attempting to reach a payment plan to settle your tax obligations, it might help to seek legal advice. The more complicated your tax situation, the more an experienced advocate can help you reach a better agreement. To help you deal with the IRS, in the Atlanta or Marietta areas, contact tax attorney Jeff Cohen, Attorney at Law. You can call me at (404) 814-0000 or use my online contact form.