Neil Lemons represents Allied Tax Solutions, a 30 year IRS tax representation firm with ex-IRS agents that help you get your life back. To learn more on IRS Installment Agreements, check out http://www.alliedtaxsolutions.com.
If you are unable to pay the full taxes at one go, it is best to apply for an installment agreement in Form 9465. This can be done online, if the tax dues are less than $25,000.
For higher tax dues you will have to fill up Collection Information Statement as well in Form 433F and may have to visit the tax office. You can also call the IRS and explain your problem to them who will then guide you in the matter.
Remember, however, to file all the back returns, if not filed, as that is a necessary precondition for granting installments.
Apart from the Collection Information Statement, the IRS may also require you to furnish copies of supporting documents. Based on the details provided of the assets and income, the IRS determines the quantum of monthly installment and the number of months for which the installments are to be paid.
This is an area of negotiation. The IRS may ask you to modify the proposals and even refuse to accept your proposal.
It needs to be remembered that the law allows only a ten year period to the IRS for collecting the dues. The time is to be measured from the date of assessment leading to the demand. However, the tax payer has the power to extend this time and if he does so, the IRS may be willing to allow installment payment beyond the ten year period.
It is in the interest of the tax payer, however, to pay the demand as early as possible. This is because interest continues to accumulate on the unpaid amount during the installment period.
Delayed payments of tax also invite penalty, though it may be possible to seek their abatement if the delay is for bonafide reasons. Considering the cumulative impact of interest and penalty, tax payers may be better off by borrowing money and paying taxes at the earliest.
The mode of payment of tax is another area of negotiation. The IRS prefers that taxes be paid by way of payroll deduction from the wages or by way of direct debit from your bank account.
This may also be in the interest of the tax payer as it makes for regular payment which enables the continuance of installment agreement. In case of default, the installment agreement may be canceled and the tax payer may be subjected to coercive recovery action such as wage garnishment and bank levy.
- Related Videos
- Related Articles
- Ask / Related Q&A
- Saving Money With Biweekly Payment Plans
- How To Settle Your Tax Debt By Negotiating A Payment Plan With The Irs: What You Need To Know If You Can’T Afford To Pay Your Tax Bill
- Do You Qualify for an IRS Payment Plan?
- Different Types of Federal Tax Payment Plans
- Debt Payment Plans - Using Debt Management Plans To Get Rid Of Debt
- Get Rid Of Debt Using Debt Payment Plans - Advice and Help
- Do you qualify for an IRS Payment Plan?
- IRS Payment Plans: Partial Payment Installment Agreement
The Trust in Tax Evaders
By: Muhammad Arshad | 10/11/2009Tax amnesty schemes are indicative of failur of tax administrations to collect due amount of tax from the potential taxpayers. Tax amnesty, 2008 issued by the FBR is a classical example of the inefficiency of FBR.
Seasonal Tax Planning Tips
By: Roni Deutch | 10/11/2009If you own a business or are self-employed, then you are probably used to the idea of tax planning throughout the year. However, even if you are a regular wage-earning employee and do not have to worry about making quarterly payments, you should still get in the habit of thinking about your taxes all year long. It will make tax season less stressful, and by planning your finances in advance you can keep your tax liability as low as possible.
6 Tactics Congress Might Use to Stimulate the Economy
By: Roni Deutch | 09/11/2009The Obama Administration and leaders in Congress are quietly working on ways to further stimulate the economy. With unemployment rates continuing to climb, and a housing tax credit due to expire in a few weeks, there is pressure on the White House to do something else to help the economy.
Management of Tax Returns During Chapter 13 Bankruptcy
By: Petter Smith | 09/11/2009Get knowledge of handling income tax returns while having chapter 13 bankruptcy. Also about filing state tax return and federal tax, 1040, 1040ez forms for free and details of e-filing tax return.
Why you should Hire a Professional Income Tax Preparer
By: Chad Fisher | 09/11/2009Most of us do not look forward to tax season at all and a way to help us not dread this nearly as much is by hiring a professional to assist us with your taxes. This can help to provide us with the help we need to get the job done correctly and quickly in the process. So, the next time you file your taxes, consider hiring a professional.
File Income Taxes to Avoid Penalties
By: Chad Fisher | 09/11/2009If you want to be certain you avoid paying income tax penalties, you will want to be certain you file your income taxes as early as possible. This can allow you to avoid many penalties that people have to pay as a result of filing their taxes late.
How to Avoid Income Tax Audits
By: Chad Fisher | 09/11/2009If you are like most people you will so most anything to avoid a tax audit. This is a very tough thing for most people to have to go through and can really be quite unnerving for most people that have to go through this. If you are called for an audit you will see that it can be tough to prepare for.
TO FILE OR NOT TO FILE YOUR TAX RETURN- THE NON-COMPLIANCE GAMBLE!
By: Muhammad Arshad | 07/11/2009Tax compliance is a complex phenomenon shaped by so many factors. It cannot be attained by simply mentioning in law who should file return or not. This articles discusses various factors affecting tax compliance in Pakistan.
How to Stop IRS Levies
By: Neil Lemons | 17/07/2008 | TaxesThe IRS can get very aggressive with tax defaulters. They also have very wide powers of recovery and will not hesitate to use it particularly when tax dues are large. However, many tax payers are caught unawares by the levy action. Learn How to Stop IRS Levies.
What to do in an IRS Audit
By: Neil Lemons | 16/07/2008 | TaxesFor most taxpayers, filing of return is the end of their engagement with the IRS for the year. In most cases, if the return is correctly filled up. What do you do in an IRS audit? Find out.
How To Remove Federal IRS Tax Liens
By: Neil Lemons | 16/07/2008 | TaxesIRS liens are hard on a family's life, health, as well as financially; they can cause a financial loop that's very difficult to get out. Read more information on how to remove federal IRS tax liens written by one expert.
Bank Levy and Wage Garnishment Law
By: Neil Lemons | 09/07/2008 | TaxesAn unpaid tax debt can lead to some very unpleasant consequences. The IRS has powers to make forcible recovery from the properties owned by the tax payer. The two most common recovery actions taken by them are levy of wages and bank account.
How to Enter Into a IRS Installment Agreement
By: Neil Lemons | 09/07/2008 | TaxesTax demands can be raised on a person for various reasons. If the return is filed but the taxes for the year are not fully paid, IRS will demand payment of the same along with interest. Penalties may also be demanded. Read this article and learn How to Enter Into a IRS Installment Agreement.
What is Penalty Abatement?
By: Neil Lemons | 01/07/2008 | TaxesThe IRS can give some still penalties if you don't pay your taxes on time. Learn what the meaning of "penalty abatement" is as well as ways to avoid it.
Corvette Delivery at the National Corvette Museum
By: Neil Lemons | 22/05/2008 | CarsLearn how you too can get your new Corvette delivered to the NCM after seeing it assembled at the Bowling Green manufacturing plant.
See Your Next New Corvette Being Assembled in Person
By: Neil Lemons | 18/05/2008 | CarsDid you know you can see your Corvette being assembled at the manufacturer's plant? You can and this article tells the process to make that happen.