Orange County Tax Preparers – IRS Payment Plans

If you don’t qualify for the IRS Offer In Compromise program, a Payment Plan may be the way to resolve your problem. Setting up a payment plan with the IRS gives you a little more time to pay off your tax debts.

Unfortunately, penalties and interest will continue to be charged on your outstanding balance as you pay the debt off. You are required by law to pay the interest on your tax debt.

The good news is that there’s a chance we can get your tax penalties removed.

Are you facing an overwhelming bill for back taxes? IRS Installment Agreements may be your best option.

What are IRS Installment Agreements ?

IRS Installment AgreementsIRS Installment Agreements allow a taxpayer to pay delinquent tax liabilities over time. For many taxpayers who have back taxes or an insurmountable tax liability, paying what is owed all at once simply isn’t possible. Establishing an IRS Installment Agreement can make paying a tax liability much more manageable.

IRS Collection Activities Cease Once an Installment Plan is Accepted

As soon as an IRS Installment Agreement is accepted, the IRS will cease from collection activities against the taxpayer. As long as the taxpayer remains current with all payment obligations and any future tax filings, the IRS will also cease the levy of bank accounts and wage garnishments.

Important Considerations Regarding IRS Installment Agreements

If you are contemplating entering into an IRS Installment Agreement, there are some facts that you need to consider:

  • There is a $105 IRS set up fee to for an IRS Installment Agreement.
  • Interest and penalties continue to accrue on the outstanding balance of the tax liability until the liability is paid in full. If the taxpayer has some sources to borrow funds, that might make for a significant savings. A second mortgage might be a simple alternative and any second mortgage interest will be tax deductible. Interest and penalties charged by the IRS are not tax deductible.
  • The IRS may file a federal tax lien to pressure the taxpayer’s compliance with the installment agreement. However, the IRS cannot execute upon the tax lien and levy upon any personal or real property you own so long as the IRS Installment Agreement is being reviewed, is actually in effect, or for 30-days after denial of the Installment Agreement. Moreover, if a lien was filed, the IRS would not proceed with levy if you were denied an agreement and then begun the IRS appeal process.

Tax Professionals can almost always negotiate better arrangements

An experienced tax professional can help negotiate an Installment Agreement with more workable payments than most taxpayers will be offered without professional representation. Most taxpayers applying on their own will find that the IRS will “demand” that you accept its calculated payment plan – if they agree to installments at all. This is because the IRS desires to collect the full tax debt as rapidly as possible. rally speaking, the IRS’s calculations for a payment plan are often unrealistic, leaving the taxpayer with little or no disposable income should the taxpayer accept their often too-aggressive plan.

Requirements to Submit an IRS Installment Agreement

The IRS requires that a taxpayer file all delinquent returns before or in concert with the submission of an application for a installment payment plan. Furthermore, the taxpayer is required to remain current on future filing obligations. Don’t stress out if you have outstanding tax returns. We can quickly and affordably prepare and file all back tax returns necessary to bring you into compliance and enable you to qualify to submit an IRS installment agreement proposal or petition for other tax settlement alternatives.

Out of work, Illness? We can petition the IRS to classify you as “Currently Not Collectible”

If your circumstances are such that you are simply not able to take advantage of an IRS Installment Agreement where you would agree to make monthly payments, or have sufficient resources to make an Offer In Compromise where a significant percentage of the tax debt is often forgiven, our tax professionals and attorneys could assist you in requesting that the IRS place your account in a “currently not collectible” status. If your circumstance are conveyed to the IRS whereby they are agreeable to classify the taxpayer as “currently not collectible,” the IRS will discontinue enforcement action and release any levies already in place. For more information concerning state or IRS installment agreements, Offers In Compromise, or Currently Not Collectible, please call us.

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