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IRS Debt and Installment Agreements

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Posted on February 28, 2019 |

You are delinquent on your tax payments and are incurring interest and possible penalties. You want to stay up to date with current tax payments, but if you do you will fall further and further behind on what you owe. You are also concerned about falling behind on other important bills and payments and may even wonder how you can keep your business afloat if all your money has to go to back taxes.

It may seem like there is no light at the end of the tunnel. Fortunately, however, the IRS is usually willing to work with taxpayers by allowing them to pay what they owe in installments so they can keep up with current obligations while paying off old debt.

Since each situation is different, a qualified Boston tax lawyer is in the best position to help you understand how an IRS installment agreement could work in your particular circumstances. In the meantime, the following information will give you a general understanding of how installment agreements work.

Are You Eligible For an IRS Installment Agreement?

First, if you can pay your IRS debt within 120 days of its coming due, you will not be able to enter into an installment agreement with the IRS. However, if you need longer than 120 days to pay the debt, chances are good that you can negotiate an installment agreement as long as you can pay off what you owe within the time limits for collections.

Types of Installment Agreements

If you owe less than $50,000 and you have established a record of paying your taxes on time in the past, you are probably going to be eligible for a guaranteed installment agreement. You will have to keep future tax payments current and pay off your IRS debt within three years.

Most people who meet the guaranteed installment agreement criteria also end up eligible for a streamlined installment agreement. Your tax liability, interest and penalties must not exceed $50,000 and you must be able to pay off the balance that you owe in less than 72 months, as well as meet other criteria for minimum payments for each installment.

If you are a business owner, you may have other hurdles to clear in order to be allowed to pay off your liabilities in installments. You will have to demonstrate that you possess the resources necessary to continue your business operations so you can make enough income to pay current and past tax debt.

Your Boston tax attorney can discuss your options and may even be able persuade the IRS to waive the statute of limitations for collections. In some circumstances the IRS will accept partial payments over an extended period of time.

Contact a Boston Tax Attorney to Learn More About IRS Installment Agreements

Contact Managing Partner Kevin Thorn online or call our Boston office at 617-692-2989 to make an appointment to speak with a tax professional at Thorn Law Group.


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