Thursday, November 15, 2007

Installment Agreement- by Tippy Taxes

There are several options a taxpayer has when he/she goes to settle IRS debt. One of those options is to establish an installment agreement. An installment agreement is a monthly payment plan. There are several thresholds the taxpayer needs to consider when establishing an installment agreement with the IRS, they are as follows;$25,000 or lessOver $25,000 but less than $100,000Over $100,000The higher the debt the more difficult it becomes to establish an installment agreement and the more documentation that will be needed to resolve the situation. When the debt is less than $25,000 the taxpayer has 2 options one is to establish a streamline installment agreement. This is where the taxpayer’s debt is divided into 60 equal monthly payment installments. If the taxpayer is unable to pay an installment agreement of this magnitude one could submit a full financial statement to the IRS to see if they qualify for a lesser installment agreement. The IRS has established National Standards for this payment plan.Debt that exceeds $25,000 always requires a full financial statement. Debt that exceeds the $100,000 threshold is handled by a specialized unit known as the “Large Dollar Unit”.

Again, each step along the way requires more financial information from the taxpayer and becomes more and more difficult to resolve. The IRS requires your financial information to be submitted using the form 433A for Individuals and 433B for Businesses. There are companies out there that offer free tax consultations. It never hurts to seek the advise of experts when it comes to your financial future. The IRS Problem Solver is also a good source of information when it comes to Installment Agreements, check them out.

-Shared by Tippy Taxes

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