Law Offices of Maryam M. Golbarg, P.C.
Your Tax Relief Attorney
Tax Solutions
Installment Agreements: Pay over time
Benefits of Paying Taxes over Time!
If you are not able to pay your tax liability (individual or business), one resolution option available to you is to enter into an Installment Agreement (IA) with the IRS to pay your tax liability within an extended timeframe. It will benefit you as it minimizes the accruing penalty and interest charges, and stop the IRS’ enforced collection actions against you. Depending on your financial situation and goals, it may be the only resolution option available to you.
You may be eligible for other resolution options (such as a Partial Payment Installment Agreement, Currently Not Collectible, or an Offer In Compromise) if your financial situations will not allow you to pay your taxes in full even within the extended time frame.
General Rules for all Types of Installment agreements
- The IRS will not grant an Installment Agreement unless and until you are in full compliance, meaning that all prior required tax returns have been filed and all required estimated tax payments have been paid;
- When in an IA, you must file all required future tax returns when due and pay all of the associated taxes in full, otherwise the IRS will default your Installment Agreement.
Different types of Installment Agreements
There are different types of installment agreements depending on the amount you owe to the IRS and the type of tax liabilities:
- Individual tax liabilities
- Business tax liabilities
We will determine if an Installment Agreement is the right resolution for you and will attempt to negotiate a monthly payment that is affordable for you to pay as a way to resolve your tax problem with the IRS.
Installment Agreements For Business Tax Liabilities
The Business owes $25,000.00 or Less
If your business owes the IRS less than $25,000.00 in payroll taxes (or the business is able to pay down the liability to $25,000.00 or less), an In-Business Trust Fund (IBTF) installment agreement may be granted if taxes are fully paid in 24 months, or before the Collection Statute Expiration Dated (CSED), whichever is earlier. The other condition is that the business should be compliant with all filing requirements and has not defaulted on an Installment Agreement in the current or prior calendar years. Further, no financial statement is required. The IRS is not required, but may file a Notice of Federal Tax Lien.
Use of the Direct Debit payment option (DDIA) is required on all lBTF Express lAs with a liability between $10,000 and $25,000.00 and a managerial approval is required.
The Business owes more than $25,000.00
If your business owes more than $25,000.00 to the IRS, the IRS will demand the filing of a financial statement for your business to determine the ability to make payments to the IRS under an installment agreement. The IRS may also propose to assess the Trust Fund Recovery Penalty against the owners, officers, directors, shareholders or other responsible individuals.
