Tax Payment Plans
  • July 26, 2021
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Many times taxpayers find themselves in a situation where they owe taxes and are unable to pay at once. The IRS takes strict action when it comes to collecting back taxes and enforcing tax laws. If you find yourself in a situation where you can’t pay your taxes all at once, you can apply for various IRS payment plans that can help you pay your back taxes in a convenient way. In this blog post, we will discuss the different payment plans offered by the IRS and how they can help you clear back taxes. Read on.

What is an IRS Payment Plan?

An IRS payment plan is a payment arrangement that provides a taxpayer with an extension of time to pay off back taxes. When you work a payment plan with the IRS, you can avoid collection actions such as federal tax liens, tax levies, and wage garnishments. While you are enrolled for a payment plan, you will not be entitled to any tax refunds as they will be applied to your balance unless you have paid off the tax debt. It is advisable to pay as much as you can afford upfront and then apply for a payment plan to minimize interest and fees.

Related Blog Post: Key Takeaways from the Latest IRS Updates in the Wake of COVID-19

Eligibility Criteria for IRS Payment Plans

The following are the conditions that you must satisfy to qualify for an IRS installment agreement:

  • You owe less than $10,000 in taxes, interest, and penalties.
  • You have filed all your tax returns for the last five years.
  • You have agreed to pay the amount you owe in full within three years.
  • You cannot pay the amount you owe in full in one go.
  • You haven’t filed for bankruptcy.

If you need more than three years to pay your tax debt or owe higher than $25,000, you will need to set up automatic payments through direct debit from your account. The same applies to businesses with a tax debt of more than $10,000.

Related Blog Post: Effect of the COVID-19 Pandemic on IRS Tax Problems

Fees for an IRS Payment Plan

There are three different payment plans that the IRS offers for taxpayers with different amounts of tax debts. The short-term plan is for 180 days or less and requires no setup fees. It is for individuals who owe less than $10,000. The long-term payment plan is for 180 days and more and requires direct debit payments from your bank account. The setup fee for this payment plan is $31 for online applicants and $107 when you apply through the phone or in person. This payment plan is for individuals who owe $50,000 or less and businesses that owe $25,000 or less. For businesses that owe less than $10,000 and individuals who owe less than $25,000, a long-term payment plan can be set up with another payment mode and requires a $149 setup fee.

The Final Word

If you owe back taxes and are unable to pay in full, you need to set up a payment plan with the IRS to avoid any serious collection actions. It is recommended to consult an experienced tax attorney who can help you decide the best IRS payment agreement and help you with all the paperwork required when setting up the payment plan. When looking for an IRS debt relief lawyer in Dallas, Texas, and nearby areas, connect with the seasoned attorneys of the Law Offices of Nick Nemeth. Our team of IRS lawyers has extensive experience in helping clients with IRS tax debt problems get a favorable outcome. To connect with one of our attorneys, call (972) 426-2553 or fill out our contact form, and we will take it from there.

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What Our Clients Have to Say

Susan WilsonSusan Wilson
03:27 25 Jan 23
I have been very pleased with the solid counsel and guidance that Nick Nemeth has provided me regarding my tax issue. I found him to be honest and straightforward which I appreciated. I was impressed with his relevant experience and knowledge . He has definitely brought me peace of mind during a difficult and stressful time.
Sarah HowardSarah Howard
03:44 14 Nov 22
I would like to thank Mr. Nick and his staff for the superb help that I received from them. My IRS problem was resolved quickly and efficiently. It took 2 visits to convince me that I was over my head. I thought that I could call the IRS, appeal my tax notices and settle on a payment plan on my own. After many phone calls to the IRS, waiting sometimes more than 4 hours with no resolution to speak of, it proved to be extremely difficult and stressful. Revisiting Mr. Nick was a huge wake up call. My account was reviewed, and a payment plan was established with the IRS within a week. I will be forever grateful to the staff who worked on my case and especially to Lorna who listened to me vent while going through this painful process.
00:33 07 Aug 22
I cannot say enough good things about Nick and his team. When I first met with Nick he was up front, honest, friendly and efficient. When I worked with one of his attorneys, Eric B, I was just as pleased. All of the staff there are nice and very helpful. I wish I hadn't waited so long to get help with my issue. Over 6yrs I tried getting through and getting anywhere with the IRS and hardly made any progress. I know this may not be the case for all, and even I thought it would take longer than it did, but 3mos and they had my situation straightened out. I still can't believe it. Thank you thank you THANK YOU for all that you did for me. This is a huge burden gone out of my life now thanks to you. If anyone needs help out there, I know you may not want to shell out more money to get their help but it may just save you in the long run.
Spoilly GirlSpoilly Girl
23:49 03 Aug 22
The Nemeth Law team is exceptional. They treat their clients like a family member who is in crisis. They want you to get the best possible outcome. I really appreciate everything that they did for me. Jake and Ashley had the greatest role in my case and it all turned out for the best for me. Thank you Nick and team for easing my fears and getting me through the long process. I'm truly grateful.
Eddie WaltEddie Walt
19:44 12 Jul 22
During a time in which competent, professional service at a fair price seems to have disappeared, Mr. Nemeth and his team are a refreshing breath of fresh air.From my first phone call to the final settlement of our case with a non-responsive IRS, they under-promised, over-delivered and were in constant courteous contact to make sure we knew exactly what was happening and where we stood.I hope to never need their services again, but, should I receive another friendly letter from the IRS...I know who to call!
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