The IRS grants taxpayers the choice to pay their tax liability. If you cannot fully pay your debt, installment agreement could be the perfect and effective solution on your part. IRS is well-driven to collect tax debt as immediate as possible. When they ascertain that you do not have any assets that can be possibly liquidated, they will start to search for other choices. You need to set an installment agreement in which you can pay on a monthly basis but before that, you should have a disposable income for you to be qualified. The US government responsible for collecting tax will be the one to determine whether your income is applicable to your tax responsibility.
In the payment plan, you have to write down the data about the IRS staff who accepts your application. All over the process, you will surely have a more comfortable and convenient experience you will enjoy. If you do not know how to do the whole process, you do not need to worry because there are qualified people whom you can count on a lot.
Installment Agreement Fees
By choosing an installment agreement, you need to pay a fee of $52 or $105. However, it depends on the types of agreement you will choose such as direct and non-direct debit. When you have an income below poverty, you will be qualified to pay for $43. When you belong to the upper class of the society, you will pay more. In other words, you will be asked to pay higher fees once you acquire more revenues on a monthly basis.
The IRS will give you an installment agreement once you meet the requirements given below:
- If you have a tax liability less than $10, 000 without the interest and other penalties.
- In the previous five years, you must have been paying and filing your tax returns. For have the last five years, you must not have experienced an installment agreement.
- If you will apply for it, you have to fully pay your tax liability in three years.
- When the IRS request financial records, you have to submit all of them. They can verify if you have the ability to pay your tax responsibility in full without an installment agreement.
Steps in applying for an installment agreement
When you have a tax debt less than $50, 000, there are a variety of ways that will allow you to apply for the installment. Nevertheless, you have to remember that you cannot apply when your account is in the collection process. If you have a tax liability less than 25, 000, you have to fill out the Form 9465 including your tax returns.
When your tax responsibility is between $25, 000 and $50, 000, you have to use the Form 9465-FS with your previous tax returns. The two forms are different from each other because the latter will help you show your ability to pay in accordance with the agreement on a monthly basis. When you still have a lot of questions about an installment agreement, you can count on Green Tree Tax as we can reliably and effectively support you. We can help you become aware of the most appropriate action you need to do as well.