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Guaranteed Installment Agreement & Streamlined Installment Agreement
To apply for a payment plan or installment plan with the IRS you must have filed all your tax returns. Meaning if you have not filed for a few years and owe tax debt you will want to file all unfiled returns first. What some people may not know is anytime you generate a new tax bill it will remove you from your current installment plan. This also applies to other IRS pay options, such as offer in compromise and currently not collectible status. In most cases all you need to do is call the IRS and ask to have the new balance rolled into the installment plan or currently not collectible status. Keep in mind if you have been approved for an offer in compromise, you must full pay the new tax bill. AS you cannot roll additional tax debt into this program. We will be covering offer in compromise next month in greater detail. Let's dive in!
Guaranteed installment agreements (guaranteed approval for an installment plan) Taxpayers who have a one-time account delinquency (meaning they are not repeat offenders of breaking multiple installment plans). If you owe less than $10,000 (excluding penalties & interest) and you meet other qualify conditions, you could qualify for this type of payment plan. If you have the financial means to full pay your tax debt but would like to apply for this kind of a plan the service (IRS) will grant this kind of a payment plan.
Streamlined installment agreements – There are two tiers of the streamline agreements based on summary balances. Not sure how much you may owe the IRS? Go to IRS.gov
You can set up your own IRS.gov account and view balances for each year you owe. Keep in mind balances are not pay off amounts. Daily interest and penalties will accrue until you not longer owe tax debt.
Tier 1: You owe up to $25,000
Tier 2: You owe between $25,000 - $50,000.00 *(Direct debit and or payroll deduction IA (installment plan) are required for balances between $25k-$50k).
If you are out of business and are a sole proprietor and owe between these amounts you may also qualify for a streamlined payment plan. The benefit to you for applying for the streamlined payment plan is quick processing time and you may not need to fill out a collection form (433 A or 433 B).
Usually, these plans do not need to be approved by an IRS manager, tax liens could still be filed but it is subject to the discretion of the revenue officer if you are assigned one.
Next week we will discuss how to waive those petty set up fees and user fees associated with IRS payment plans along with additional payment plans. Tell then! 😊 Need more information? Give us a call/text or email us! info@pegasustaxpros.com 904-274-9503
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