Options For IRS Installment Payment Plan
In the event a taxpayer cannot afford to pay the taxes that he owes to the Internal Revenue Service, an IRS installment payment plan can be vital. When using an IRS payment plan, the taxpayer usually takes what he owes and divide it up into equal monthly payments when paying the Internal Revenue Service.
Employing an IRS installment payment plan can be an option that a large number of taxpayers have on the table when their tax debt would seem insurmountable. The fact is the IRS provides a guaranteed installment plan as long as taxpayers meet specific qualification guidelines. Such as the taxpayer needs to be current on his taxes and have filed returns for each of the last five years. Also, the taxpayer should be able to repay the debt within three years. Each and every taxpayer gets to work with an installment agreement once every five years with no issues. Providing these criteria are met, the taxpayer could set up the installment agreement by simply filling out a simple form from the IRS.
While the majority of taxpayers can get access to an IRS payment plan automatically, some taxpayers will need to negotiate directly with the IRS in order to obtain one. A payment plan or installment agreement is only available automatically for debts up to $25,000. In the event a taxpayer has a tax debt more than $25,000, he will have to work with the IRS directly to be able to negotiate a payment plan. If the debt is under $25,000 and will take less than 5 years to pay off, a streamlined agreement may be used. If the debt is going to take longer than 5 years to pay off, the taxpayer will need to negotiate directly with the IRS.
Another option for a number of taxpayers to take into consideration is a partial repayment plan. When a taxpayer is not able to pay all of the money that he owes, a partial payment installment plan could possibly be in order. Using this kind of payment plan, the payment just isn't depending on the amount owed, but is instead based on the amount that the taxpayer could possibly afford to pay. This makes it easier for people who have very low incomes and cannot afford to pay the tax burden that has been placed on them.
On the subject of obtaining an installment agreement, the taxpayer has got to fill out the correct forms. This installment agreement form is going to be sent in to the IRS so that the payment plan could be registered or approved.
It's no secret that the Internal Revenue Service is making a huge effort to collect every last cent of unpaid employment taxes or unpaid payroll taxes the government is owed. In that spirit, the IRS is cracking down on small businesses with unpaid payroll taxes and past due employment taxes, which until recently have largely flown under the radar. Any company with unpaid employment taxes or delinquent payroll taxes has committed a federal crime and can expect devastating results. If you have unpaid employment taxes or unpaid payroll taxes and are in need of business tax relief, here is what you need to do.
Unpaid employment taxes /unpaid payroll taxes tip #1: Understand the gravity of your situation. The IRS views unpaid payroll taxes and unpaid employment taxes as theft, and they carry severe consequences. Aside from penalties (33% plus interest at 16 days past the day you should have filed the 941 - payroll tax return) and prison time, the IRS can padlock your business's doors without a court order, seize your equipment and contact your customers to intercept any future payments owed to you.
The IRS doesn't care whether you stay in business or not - just as long as all unpaid employment taxes or past due payroll taxes owed are accounted for. You need business tax relief and negotiating a properly structured payment plan or IRS installment plan can help you manage your cash flow and cut new penalties in half.
Unpaid employment taxes /unpaid payroll taxes tip #2: Get professional advice NOW.
Even more than a personal audit, an unpaid payroll tax or delinquent employment tax investigation has the power to destroy you and the people who work for you. The IRS has subjective thresholds it uses to determine who was culpable in failing to file and/or pay unpaid employment taxes or unpaid payroll taxes. They can assess the Trust Fund Recovery Penalty (TFRP) and go after anyone and everyone including company owners, officers, shareholders, CPAs, accountants, EAs and bookkeepers.
You might be tempted to represent yourself before the IRS in your bid for business tax relief. Don't. This is the equivalent of defending yourself against murder charges without a lawyer. You are in over your head and have too much to lose.
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Regardless of how well a taxpayer does financially, using an IRS installment payment plan may be necessary at some point. It is sometimes difficult to calculate how life changes can impact tax liability and an unexpected tax burden may appear. When that happens, using an IRS payment plan could be exactly what the taxpayer needs for help.
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