Negotiating an Installment Agreement with the IRS
Over 210 million business and individual tax returns are filed on an annual basis, and many of us make the kinds of mistakes which end up costing us additional taxes and IRS penalties. Most Americans fear an IRS audit nearly as much as they fear a potential root canal, and the fear of owing the IRS money is almost as bad. In fact, when most of hear the words “wage levy,” “bank levy,” “property seizure,” and “federal tax lien,” it brings about a severe level of stress in our lives. The fact is, if you simply cannot afford to pay all your taxes by the time given you by the IRS it is possible to contact them and negotiate an installment agreement for the balance owed.
Establishing an installment agreement with the IRS is one of the top ten reasons individuals contact the IRS. Many people feel that the IRS is somewhat negligent in providing the necessary information to those who need help paying their taxes therefore it is up to the individual to seek out the necessary information. The IRS will pursue collection through wage or bank levies if an installment agreement is not set up in a timely manner and they consider it to be your responsibility to set up your own installment agreement. If you have decided to request an installment agreement which will allow you to pay your taxes over a stated period of time, you can use Form 9465, Installment Agreement Request to send your request to the IRS. As governmental forms go, this happens to be one of the easier ones to fill out. You will be required to provide your basic information as well as the tax year you owe for, the amount owed and how much you are able to pay each month.
When Can You Use Form 9465?
You can use this form if you are unable to pay your current tax owed in full or if you owe back taxes. If you are unable to owe the tax amount on the taxes you are currently filing, don’t wait to file. Go ahead and file on time, but include Form 9465 with your return, and make sure it is right on top so it will be easily seen. Prior to finalizing the agreement the IRS may ask for financial information from you which proves you don’t have the current income or assets to enable you to pay your IRS bill in full. The IRS may ask you to complete Form 433-A if you are setting up an installment agreement as an individual or Form 433-B if you are providing financial information for your business in order to set up an installment agreement.
After The IRS Has Approved Your Installment Agreement
Once your IRS installment agreement is in place you can allow yourself a sigh of relief since the IRS is not allowed to enforce further collection beyond your agreement or to modify or terminate your agreement unless one of the following conditions applied to your agreement. If you provided incorrect or incomplete information on your 433-A or B form, if your financial circumstances have changed significantly since you signed the installment agreement, if you fail to make your payment as agreed or fail to pay another tax on time or should you neglect to provide updated financial data when the IRS requests it, your agreement could be nullified. If the IRS has good reason to believe that you are attempting to elude the payment of your taxes, hiding your assets or preparing to flee the country they may also nullify your installment agreement. Barring any of these issues, however, you should be able to successfully pay your IRS tax monthly until it is paid in full.
Should you have any other questions regarding your past due taxes or an installment agreement with the IRS it is a good idea to contact an attorney who can provide further information.