If you owe the IRS money, it`s essential to know your options for payment. One of those options is an installment payment agreement. This payment plan allows you to pay your debt in monthly installments, making it more manageable.
To qualify for an installment payment agreement, you must owe the IRS $50,000 or less in tax, penalties, and interest. You must also be current on all tax filings and have no outstanding payment agreements with the IRS.
There are two types of installment payment agreements: guaranteed and streamlined. The guaranteed installment payment agreement is for taxpayers who owe $10,000 or less and can pay off their debt within three years. This type of agreement is easy to set up and doesn`t require the IRS to file a federal tax lien.
The streamlined installment payment agreement is for taxpayers who owe $50,000 or less and can pay off their debt within six years. This type of agreement is also easy to set up, but the IRS may file a federal tax lien to secure its interest in the debt.
To apply for an installment payment agreement, you must complete IRS Form 9465, Installment Agreement Request. You can submit this form online through the IRS website or by mail. You must also include a proposed payment amount with your request.
Once you have an installment payment agreement in place, it`s essential to make your payments on time. If you miss a payment, the IRS may terminate your agreement, and you may face additional penalties and interest. If you can`t make your payments, it`s crucial to contact the IRS to discuss your options.
In conclusion, if you owe the IRS money, an installment payment agreement can be a helpful option to resolve your debt. However, it`s important to understand the requirements and responsibilities of this payment plan to avoid additional penalties and interest. If you have any questions about installment payment agreements or other tax payment options, contact a qualified tax professional or the IRS.