How to Set Up Payment Plan with IRS

Get a letter from the IRS? Owe money? Did you know you can set up a payment plan with IRS?

The IRS has relaxed the installment agreement requirements due to the COVID pandemic. When you request a payment plan (installment agreement), the IRS is generally prohibited from garnishing your bank accounts or wages.

Over 10 million people in the United States owe back taxes to the IRS. For more information on how you can pay your back taxes under an IRS payment plan, please contact our AV Rated tax attorney at Columbus, Ohio-based Porter Law Office, LLC. We specialize in resolving tax controversies for businesses and individuals.

You owe less than $10,000

If you owe less than $10,000, you are eligible for a guaranteed payment plan. Guaranteed payment plans are only available to individual balances. You must full pay the tax liabilities (including interest and penalties, known as accruals) within three years.

A collection information statement, or CIS is not required. A CIS is a form the IRS uses to collect detailed information about your assets, income and expenses. Finally, the IRS is not required to file a federal tax lien under the terms of a guaranteed installment agreement. You can set one up yourself on IRS’s website.

You owe between $10,000 and $50,000

If you are an individual and you owe between $10,000 and $50,000, you may be eligible for a streamlined installment agreement. Businesses are eligible if the total tax is below $25,000. The IRS has increased the individual streamlined threshold to $250,000 under their COVID Taxpayer Relief Initiative.

A CIS is not required so long as the tax and accruals are full paid within 72 months. The IRS is not required to file a federal tax lien. Setting up a streamlined installment agreement is more difficult than a guaranteed agreement. Generally, you must propose a payment amount to the IRS that meets the manual guidelines. If you need help, contact us.

Routine Installment Agreements

You may be eligible for a routine agreement if you do not qualify for a guaranteed or streamlined installment agreement. A routine agreement must be full paid within the Collection Statute Expiration Date, or CSED. A CIS would be required, so would a lien determination.

These agreements are most applicable to businesses who owe more than $25,000 and individuals who owe more than $50,000 (or $250,000 under the current COVID policies).

Routine agreements are anything but routine. These cases are generally referred to the field and handled by experienced revenue officers with the IRS. The IRS will collect levy source information and actively pursue your assets. You would be encouraged to consult with an experienced tax lawyer to help setup a routine agreement. An experienced tax attorney can help analyze your assets, income and expenses, act as a buffer between you and the IRS, and provide help with appealing adverse determinations by revenue officers.

Partial Payment Agreements

An often forgotten about installment agreement is the partial payment installment agreement, or PPIA. The inspector general for tax administration recently criticized the IRS for not utilizing the PPIA program more. PPIAs are good when your current financial situation is such that you cannot full pay by the CSED but you have some ability to pay.

Before granting a PPIA, the IRS is required to take stock of your assets, income and expenses. So a CIS is required, as is a lien determination. In reality, the IRS rarely grants these agreements and tend to navigate toward currently not collectible status. Don’t let your tax attorney forget about analyzing your eligibility for a PPIA. They can be very good agreements.

Contact an Experienced Ohio Tax Attorney

IRS Installment Agreement Representation | Columbus Tax Lawyer

Porter Law Office, LLC is an AV-Rated boutique law firm located in Columbus, Ohio. We help taxpayers resolve their problems with the IRS. We can help set up payment plan with IRS. Your options are dictated by IRS rules and procedures. If you need help entering into an installment agreement with the IRS, contact the experienced Columbus, Ohio tax lawyer at Porter Law Office, LLC today.