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Monday, March 12, 2018

IRS Installment Agreements

If you are financially unable to pay your tax debt immediately, you may be able to make monthly payments through an installment agreement with the IRS.

Before applying for a payment agreement, you must file all required tax returns.

You may be eligible to apply for an online payment agreement:

·Individuals must owe $50,000 or less in combined individual income tax, penalties and interest, and have filed all required tax returns.

·Business must owe $25,000 or less in payroll taxes and have filed all required tax returns.

Even if you are ineligible for an online payment agreement, you can still pay in installments:

·Complete and mail Form 9465 and Form 433-F

·Call 800-829-1040 or the phone number on your bill or notice.

Things to Consider

·Penalties and interest continue to accrue until your balance is paid in full.

·Your future refunds will be applied to your tax debt until it is paid in full.

·There may be a restatement fee if your agreement goes into default.

·You must pay at least your minimum monthly payment---on time.

·You must file all required tax returns on time.

·You must contact the IRS if you need to make any changes to your agreement.

·Ensure the IRS has your current address if you move by filing Form 8822 Change of Address.

·Include your name, address, SSN, daytime phone number, tax year and return type on your payment.

Currently, the IRS One Time Fee for a standard installment agreement or payroll deduction agreement is $120 or $52 if you choose to pay through a direct debit from your bank account.


This article was written by Donald M. Scherzi, CPA, CFP, LLC
Mike Lupo, SCORE Counselor
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