I represent taxpayers in Gainesville and the state of Florida who have tax issues with the IRS and Florida Department of Revenue. The has various forms of Installment Agreements that allow a taxpayer to pay their past due taxes over time.
The various flavors of Installment Agreements are:
- Automatic Installment Agreement– IRS will Automatically agree. Just fill out an on-line form.
o Must owe less than $10,000
o During the past 5 tax years, the taxpayer must not have owed any tax and not had an Installment Agreement.
o Taxpayer agrees to pay in full within the next 3 years.
- Streamlined Installment Agreement – Does not require taxpayer to disclose their financial information. Simply fill out an on-line form.
o Owes less than $50,000 and can pay in full over a 72-month period.
o Owes less than $100,000 and can pay in full over an 84-month period.
o During the past 5 tax years, the taxpayer must not have owed any tax and not had an Installment Agreement.
- Regular Installment Agreement – If you can’t qualify for Automatic or Streamlined, here is where you must go.
o Requires you to file a Form 433 providing the IRS with information about what you own and your future financial expectations.
o Requires IRS approval to put the plan into action.
- Partial-Pay Installment Agreement – What happens when you demonstrate that you can’t pay 100% of the tax debt.
o Same process as the Regular Installment Plan in that you must provide financial information using Form 433 and get IRS approval.
o IRS will revisit the plan every 18 to 24 months.
It’s very easy to default on one of these plans. Simply do any of the following:
- Incur a new debt by filing a tax return with a balance due
- Fail to file a tax return timely resulting in a late filing penalty
- Fail to make payments as agreed
Default results in all the taxes becoming immediately due and collections actions back in play. Taxpayers who have defaulted on their agreements also have a harder time in negotiating future deals with the IRS. The lesson here is to only make agreements that you truly believe you can live up to.
If you or someone you know has received a Notice of Intent to Levy or some other federal or state tax issue, please feel free to contact me at either (352) 317-5692 or email jim@backoffice2.net.
Gainesville, FL
Cell (352) 317-5692
Office (352) 376-9401
Fax (352) 376-9440
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