Payment Plans Installment Agreement
  • September 26, 2022
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Every year, many taxpayers in Dallas find themselves in a situation where they owe the IRS more in taxes than they are able to pay currently. The Internal Revenue Service (IRS) has provisions that are especially designed to help such taxpayers dig themselves out of the hole. This is in the form of a range of payment plans in which defaulting taxpayers can enroll to get IRS debt relief. The IRS has the right to terminate the installment agreement and declare a taxpayer to be in default if they fall behind on payments or cease paying altogether. When faced with such a scenario, the best way forward is to hire an experienced IRS tax attorney in Fort Worth, TX. In this blog, we are going to discuss how you can proceed after defaulting on an IRS payment plan.

Related Blog Post: Does a Payment Plan Stop Penalties and Interest?

When is a taxpayer in default?

Defaulting taxpayers are either late with their payments or unable to make them at all. If you have a genuine justification behind missed payments, and it doesn’t become a habit, the IRS may overlook one or two such instances, otherwise you will be regarded as being in default. This generally happens if the IRS thinks that you are not taking your installment plan seriously, or when you simply stop making payments altogether. Here are the top four reasons why taxpayers may be considered to be in default:

  • Missed payments for an IRS payment plan
  • Filing another return and failing to pay the tax liability in time, or owing a balance from another return and failing to pay it in full.
  • You don’t provide the IRS with updated financial information despite being asked to do so by the government agency.
  • Not paying a modified payment amount that you previously agreed to with the IRS.

Does the IRS allow multiple collection arrangements for a single taxpayer?

In a majority of cases, the IRS does not allow more than one collection arrangement for a taxpayer. Suppose you have been enrolled in an installment agreement for one year. If you file and owe that amount during the next year, the IRS will not provide you with a separate payment plan on the new return’s balance. Simply put, taxpayers can only have a single agreement plan with the IRS, which must cover all outstanding amounts.

Related Blog Post: Answering Commonly Asked Questions about Payroll Tax Payment

The timeline after defaulting on a payment plan

Here is what the timeline looks like after defaulting on an IRS payment plan:

  • IRS issues default notice (CP523 OR Letter 2975)
  • You can reinstate the agreement or request a new one to avoid levies
  • Your existing installment agreement is re-established, or the IRS sets up a new agreement (Depends entirely on IRS)
  • If a new agreement is not introduced, the agency might seek enforced collection of the dues 90 days after the CP523 notice was sent.

It is always best to consult an IRS tax attorney in Fort Worth, Texas when looking to enroll in a payment plan or in default on your current IRS payment plan.

Final word

It is quite easy to get proven tax help in Fort Worth. An experienced IRS tax attorney in Fort Worth, TX, can help you explore the different tax debt relief options to find one that suit you the best. When looking for a reliable Fort Worth tax lawyer or attorney, look no further than the Law Offices of Nick Nemeth. Your search for a ‘tax lawyer near me’ ends here. Our team of experienced IRS tax lawyer in Dallas, TX, can help resolve all your IRS tax-related problems. Contact us today for a confidential no-obligation consultation at (972) 426-2553 or fill out our contact form, and we’ll get back to you as soon as possible.

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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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