Settling Back
Taxes Owed With an Installment Agreement
By
Manuel Davis Jr.
Every year there are thousands
of people that cannot pay in full
the amount of taxes that they owe.
If you are one of these people who
cannot pay their entire tax bill
owed, an installment agreement could
be a good choice for you. This type
of agreement can solve just about
any issue having to do with back
taxes ranging from not being able
to pay to removing a tax levy. This
type of agreement is easy and will
put you on good terms with the IRS.
An installment agreement is the
term used by the IRS for a payment
plan. Setting one up will allow
you to pay off the taxes that you
owe over a specified period with
a minimum monthly payment amount.
The amount of your monthly payment
must be large enough to pay off
the entire balance of taxes owed
in about a 2 year period. Sometimes
a payment plan can be rejected for
an unreasonable payment amounts,
but the IRS will get back to you
with a more acceptable amount. One
thing to keep in mind is that while
the amount of taxes is owed it is
still accruing interest monthly
and the IRS requires you to pay
interest on the outstanding balance,
so the faster it is paid off the
less you will pay in interest.
To request an installment agreement
you will have to download form 9465
from the IRS and fill it out appropriately
to set up the correct payment amount.
The individual IRS offices will
approve installment agreements up
to $10,000. If the amount is higher
than $10,000 they will request additional
financial information and will require
some more paper work, sometimes
people hire tax professionals to
help with installment agreements
above $10,000.
Once your installment agreement
is accepted with the IRS you are
on good terms with the IRS and they
will honor your agreement. There
are several things that you can
do to make the agreement ineffective
and the IRS can begin taking collection
actions against you. You must not
miss any payments, cannot fall behind
on any other taxes due to the IRS,
you must give updated financial
information when requested to the
IRS or the IRS finds out that you
gave false information when requesting
the agreement.
At times when agreements are
request and the IRS feels that it
may seem a bit unreasonable, they
will try to pressure you to sell
some of your assets or to borrow
money from friends and relatives.
Do not let this pressure get to
you. Intimidation is one of the
strongest weapons of the IRS, they
would much rather collect tax amounts
sooner rather than later and it
is in their interest to try to make
you pay sooner. They will accept
your agreement, so don't give into
any pressures you may encounter.
For more information on IRS Payment
Plans you can visit the site here:
IRS Payment Plans
BackTaxesHelp.com is a site dedicated
to helping people
settle back taxes by providing
all relevant information as well
as connections with tax specialists.
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