Understanding the Types of IRS Tax Installment Agreement

Types of IRS Tax Installment Agreement

Are you feeling overwhelmed by your tax debt? What can you do if paying your tax debt quickly is simply not an option? For your fortune, the IRS allows taxpayers to pay off tax debt through an IRS installment agreement. Find out more about each type of IRS payment agreement. This way you can figure out which one is a good option for you!

The 4 Types Of IRS Installment Agreements

The IRS offers taxpayers four different types of payment agreements. These include: guaranteed, streamlined, partial payment and non-streamlined agreements. Let’s explore what each one of these entails.

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Guaranteed Installment Agreement

This type of installment agreement ensures that the IRS won’t file a tax lien against you. This allows you to pay back your tax debt in installments without worrying about extra tax problems.

To apply for this type of IRS tax installment agreement, you have to meet the eligibility criteria including:

  • Owing the IRS less than 10,000 dollars
  • Not having an installment agreement in the previous year. This means having correctly filed and paid the previous year’s taxes.
  • Not being able to pay tax liability at the right time or within 120 days of that date
  • Being able to pay off the liability within three years (in installments)
  • Committing to making the minimum monthly payment (at least)

If you meet these criteria, then you might want to consider applying for this IRS installment agreement.

Streamlined Agreement

If you qualify for a guaranteed agreement, then you’ll likely qualify for a streamlined agreement. By learning about both options, you can make an informed choice of an IRS installment agreement. In both cases, you’ll be able to pay off your debt in installments, without being subject to a tax lien.

Eligibility requirements do vary a little bit. Rather than a maximum of 10,000 dollars of debt, you can owe up to 50,000 with this type of IRS payment agreement. Additionally, you must be able to pay off the balance within 72 months. To access this type of payment installment agreement, you’ll have to pay a fee. The few can be reduced if you opt for payments to be made directly from debit.

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Partial Payment Agreement

The IRS will come into an agreement with the taxpayer accepting partial payment of the taxpayer’s tax liability. The application procedure is different in such instances. You have to complete a financial statement form, which the IRS will carefully review. Once the information is verified, the IRS will proceed with deliberations. When approved, you’ll enter the agreement on the condition of participating in a financial review within two years when changes can be made to the payment installments.

Non-streamlined Agreement

Lastly, this option applies to those owing more than 50,000 dollars to the IRS. To get his type of IRS installment agreement approved, you have to fill out the necessary forms and provide the IRS with ample information. This information will be reviewed to come up with a decision. An experienced Dallas tax attorney can help you with this type of IRS installment agreement.

Need help getting an IRS installment agreement?

The Law Offices of Nick Nemeth has experienced tax law attorneys that can help you apply and get approval for an IRS installment agreement. Do you want to find out what the best course of action is to resolve your tax problems? Call us at (972) 484-0829 for a free consultation.