Methods of IRS Installment Payment Plan
When a taxpayer cannot afford to pay the taxes that he owes to the Internal Revenue Service, an IRS installment payment plan may be necessary. 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.
Utilizing an IRS installment payment plan is definitely an option that lots of taxpayers have on the table when their tax debt seems impossible. Actually, the IRS will offer a guaranteed installment plan so long as taxpayers meet certain qualification guidelines. For example, the taxpayer must be current on his taxes and have filed returns for each of the last five years. The taxpayer also needs to be able to repay the debt within three years. Each taxpayer gets to use an installment agreement once every five years without any issues. Provided that these criteria are met, the taxpayer can easily set up the installment agreement simply by filling out a simple form from the IRS.
While most taxpayers are able to get access to an IRS payment plan immediately, some taxpayers should negotiate directly with the IRS in order to obtain one. A payment plan or maybe installment agreement is readily available automatically for debts up to $25,000. If a taxpayer has a tax debt above $25,000, he should work with the IRS directly so as to negotiate a payment plan. If the debt is lower than $25,000 and will take less than 5 years to repay, a streamlined agreemen possibly can be used. If the debt will take longer than 5 years to pay off, the taxpayer must negotiate directly with the IRS.
An alternative for some taxpayers to consider is a partial repayment plan. When a taxpayer is unable to pay all of the money that he owes, a partial payment installment plan might be in order. With this type of payment plan, the payment seriously isn't based on the balance due, but is instead based on the amount that the taxpayer could afford to pay. This will make it a lot easier for people who have very low incomes and cannot afford to pay the tax burden that was placed on them.
With regards to getting an installment agreement, the taxpayer needs to fill out the appropriate forms. This installment agreement form will probably be sent in to the IRS so that the payment plan may be registered or approved.
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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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