An Installment Agreement is a payment arrangement whereby the IRS allows a taxpayer to pay their tax debt over a period of time by way of a monthly payment. When a payment plan is established, the IRS will not take any further collection action, such as garnishments of wages or seizure of bank accounts. The taxpayer must be current with all past tax returns before beginning an Installment Agreement. Penalties and interest do continue to accrue until the full balance is paid. Also, a tax lien may be filed as part of the terms of the Installment Agreement, depending on the amount of the total tax debt.
Often, when a taxpayer attempts to establish an Installment Agreement on their own, IRS wants to collect the taxes as fast as they can. In many cases, the unrepresented taxpayer finds themselves in an Installment Agreement that is too burdensome. This in turn often leads to a default of the Installment Agreement and the beginning again of the collection machine. Therefore, it is critical to have an affordable Installment Agreement established properly from the very beginning.
If you cannot afford to make monthly payments and do not qualify for any other type of relief, such as an Offer in Compromise, we may negotiate to have your account placed in a Currently Not Collectible (CNC) status. Under CNC status, you will not have to make any payments and there will not be any type of collection action unless there is a material change in your financial circumstances.