Do you owe the IRS back taxes? Do you find it challenging to gather the funds to pay your federal taxes? You’re not the only one in this situation.
Many people discover that they owe more in taxes than anticipated every year. Fortunately, an IRS Installment Agreement can make this burden just a bit lighter for you.
In this article, discover how you can attain IRS debt relief as quickly as possible.
Can You Settle Your Tax Debt for “Pennies on the Dollar”?
If you’re like many other taxpayers who are drowning in back tax debt, you’ve probably heard about “settling your tax debt for pennies on the dollar.” As with most things, if it seems too good to be true, it probably is. While there are options for paying off a tax obligation, a payment plan is significantly more practical. The IRS Installment Agreement is the most practical method of resolving your tax obligation.
If you can’t pay your tax bill right away due to financial constraints, you can set up a monthly payment plan with the IRS. With an installment agreement, you can make a series of monthly payments over up to 72 months.
What is an IRS Installment Agreement?
You establish an agreement with the IRS to pay off your complete tax bill over a certain period under an IRS payment plan.
Your debt is still subject to interest and a monthly late payment penalty while you’re on a payment plan. Payment options are available for a period of up to 72 months. You can make extra payments against your obligation through the IRS’s online payment system.
The IRS can pursue steps such as wage garnishment and bank levies if you owe them money. This will no longer happen if you sign up for a payment plan. It’s preferable to act on your tax relief solutions before the IRS does.
What are the Requirements for an Agreement?
Your tax filings and payment obligations must be current before you can qualify for an IRS installment arrangement. Moreover, you have to complete and submit all of your tax returns. The amount you owe determines whether or not you are approved, and approval is typically automatic if your debt is less than $10,000.
If you owe more than a particular amount (usually $100,000 or more), you may be required to provide income and asset declarations. Your capacity to pay is determined by the information you provide on Form IRS 433-F. In any case, you must pledge that you will make a monthly payment, and if you do not, your installment plan may be terminated.
The most challenging phase for many people will be ensuring that their taxes are submitted on time and correctly since this will impact the amount owed.
What Is the Cost For An IRS Installment Agreement?
When you engage in an IRS installment agreement, you will be charged a one-time installment agreement user fee.
When you apply for an IRS payment arrangement, the IRS will typically recognize you as a low-income taxpayer and may eliminate or decrease your application cost. If you are not classified as a low-income taxpayer, fill out Form 13844, the application for Reduced User Fee for Installment Agreements.
Irrespective of an IRS installment agreement fee, it will be less expensive than other options such as loans.
Don’t take out a loan to pay off your IRS tax burden! Instead, work with the IRS to set up an installment plan. It’s the simplest option, and in many circumstances, it won’t harm your credit. If you need help, it’s also an excellent decision to consult with a tax resolution specialist.
The trusted tax professionals at Axiom Tax Resolution Group are ready to provide tax relief solutions for your tax problems with the IRS. Contact us today!