A Step-by-Step Guide on How to Qualify for an IRS Installment Agreement
Are you struggling to pay off your tax debt in one lump sum? Don't worry, you're not alone. Many taxpayers find themselves in a similar situation, but the good news is that the IRS offers installment agreements to help make paying off your debt more manageable. In this blog post, we'll provide you with a step-by-step guide on how to qualify for an IRS installment agreement.
Step 1: Determine Your Eligibility
Before you can apply for an IRS installment agreement or long-term payment plan, you need to determine if you're eligible.
To be eligible, you must meet the following requirements:
You owe $50,000 or less in combined individual income tax, penalties, and interest.
You've filed all required tax returns.
You can't pay your tax debt in full when it's due.
If you meet these requirements, you can move on to the next step.
You may also be eligible for a Guaranteed installment agreement:
Your tax debt is less than $10,000 and
If, in the past 5 tax years, you (and your spouse if filing jointly) have consistently filed income tax returns and paid owed income tax on time without entering into a prior installment agreement
Additionally, you must commit to paying the entire amount within 3 years, follow tax laws during the agreement, and demonstrate financial inability to pay the full liability when due.
Step 2: Determine Your Payment Amount
Once you've determined your eligibility, you need to determine how much you can afford to pay each month. You can use the IRS Online Payment Agreement tool to help you calculate your payment amount.
Step 3: Apply for an Installment Agreement
To apply for an installment agreement, you can use the IRS Online Payment Agreement tool or fill out Form 9465, Installment Agreement Request.
You may also apply via mail by completing Form 9465 and mailing it to the IRS, or by calling the IRS directly at 1-800-829-1040.
Step 4: Wait for a Response
After you've applied for an installment agreement, you'll need to wait for a response from the IRS. If your request is approved, you'll receive a confirmation letter outlining the terms of your agreement, including your payment amount, due date, and any fees or penalties.
Step 5: Make Your Payments
Once your installment agreement is approved, it's important to make your payments on time and in full. If you miss a payment or don't pay in full, you could default on your agreement, which could result in additional fees and penalties.
Speak With an Experienced IRS Tax Attorney
if you're struggling to pay off your tax debt in one lump sum, an IRS installment agreement could be a viable option. By following these five steps, you can qualify for an installment agreement that works for you. If you still have questions or concerns, it's always best to seek the advice of a qualified tax attorney like Brian T. Loughrin. Contact us today to learn more about IRS installment agreements or other options that may be available for your situation.