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IRS Tax Installment Agreement

If a taxpayerís assets and income stream are larger than the tax owed, an Installment Agreement may be an option to resolve IRS problems. As with most IRS programs, the Installment Agreement is a formal process requiring in-depth financial disclosures and analysis, however, the request prohibits the IRS from taking enforcement collection action against the taxpayer. Since there are guidelines regarding how the IRS determines the payment amount and time framefor the agreement, the tricky part is getting an agreement with a payment you can afford. The installment agreement
may pay all or only part of the back tax liability depending on the circumstances and the amount of time that the IRS has left to collect the tax debt.  Itís important to remember there are competing interests at work during the negotiation of an IRS installment agreement. On one hand, the IRS wants what it considers its money, in-full as quickly as possible. On the other hand, the taxpayer wants a payment that is manageable and affordable, over time.  We have expertise in helping you with the negotiation process with the IRS.

This unfortunately causes many taxpayers to agree to monthly payments which are greater than they can reasonably afford, only to result in more financial hardship. This often means that the taxpayer eventually defaults on the installment agreement causing the IRS to begin its collection actions all over again. If an installment agreement is the right choice for you, it is important to have an affordable, realistic installment agreement with a manageable payment properly in place.  After an installment agreement has been established, the IRS suspends its collection efforts and stops issuing wage garnishments, bank levies, notices and making harassing phone calls. Additionally, depending on the circumstances, the IRS may file a Notice of Federal Tax Lien to protect its interest until the liability is paid in full. Finally, the taxpayer must continue to be compliant with future tax filings and payments, or else the agreement will be deemed to have breached.  In a nutshell, for taxpayers who cannot afford to full pay their back taxes immediately in one lump sum and do not qualify for an Offer in Compromise or Currently Non-Collectible status, look to an installment agreement.

Rhonda L. Russell, Principal / Russell Financial & Business Services / NIPR National License # 8728891
Bidwell & Russell Tax Defense, Ltd / Tax Attorney & IRS Audit Representatives
Tax and Estate Planning / Tax Debt Solutions