A Step by Step Guide to Set Up an IRS Installment Plan

How to Set Up a Payment Plan with IRS

There are times in life, when we find ourselves in a situation that may keep us from honoring our tax obligations. While there is no excuse for carelessness or deliberate avoidance; the IRS has various provisions for those who have a “reasonable cause” preventing them from paying their dues. IRS payment agreement is one such provision, under which you can pay your taxes in periodic installments. In such cases, it is important to have an IRS tax attorney on your side, who can help navigate the complex maze of the IRS taxation system and law. An IRS tax attorney can help request and negotiate a suitable IRS installment agreement based on your financial condition and other dynamics at play. Continuing on the topic, in this blog, we will discuss the steps involved in requesting an IRS payment agreement. Read on.

Determine the Payable Amount

First thing first, determine the total amount you owe to the IRS. If unsure, you can either directly contact the IRS or cross-check the amount from the copies of your tax returns. The amount payable will include the due tax amount plus interest and penalties, if any.

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Apply Online – Fill Form 9465

Fill out the form 9465 for instalment agreement request, or apply online if you fall in either of the two categories:

  • Long-term payment plan: Owe $50,000 or less in combined tax, interests, and penalties, and have filed all previous tax returns.
  • Short-term payment plan: Owe less than $1,00,000 in combined tax, interests and penalties.

Acceptance of Installment Agreement by the IRS

To qualify for an IRS installment agreement, your total tax liability should not exceed $10,000, and the monthly payments that you decide to pay should clear the due amount, in full (including interests and penalties), within 3 years.

Deciding the Payment Day

You can decide the day on which you will make the monthly payments. It is important to adhere to the decided date to avoid any future actions by the IRS. You can choose any date between the 1st and 28th of the month.

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Making Payments

Timely payment of monthly installments is important to avoid any future complications. IRS Direct Pay is the easiest way to pay the installments. All you need to do is login using your identification information, choose the “Installment agreement” option, and make the payment using your bank details. You will receive a confirmation email once the payment is received by the IRS. If you decide to pay the amount by a cheque or money order, it is recommended to send out the mail at least 10 days before the due date.

Wrap Up

A comprehensive knowledge regarding the reliefs provided by the IRS can go a long way in helping you avoid the problems that can arise due to delays or non-payments. That is the reason why it is extremely important to consult an IRS tax attorney to better understand the various rules and regulations, and help set up an IRS instalment agreement in Dallas or elsewhere. To schedule a no-obligation consultation with a seasoned IRS tax attorney, simply call (972) 484-0829 or fill out our contact form.