IRS installment agreements can last anywhere from a few months to five years or more. The following factors can all influence the length of your repayment period:
- How much you owe the IRS
- Your ability to repay your tax debt
- When the collections statute expiration date (CSED) is
- Whether you want to pay off your tax debt faster to minimize penalties and interest
If you just need a little extra time, you can request a short-term payment plan.
Short-Term Payment Plans
Short-term payment plans can last up to 120 days. These plans can be a good option if you have tax debt from a single return or a few returns.
You’ll pay less in late-payment penalties and interest with a short-term payment plan, and there aren’t any setup fees. However, if you have a larger unpaid balance, you might not have the disposable income to pay off your tax debt in four months or less.
Streamlined Installment Agreements
Streamlined installment agreements can last up to 72 months. If your CSED is in less than 72 months, you’ll have to pay off your full balance by the CSED to qualify for streamlined processing.
The basic way to figure out your monthly payment is to divide your balance by 72. You’ll generally need to pay at least this amount each month. You can propose a higher monthly payment if you can afford it, which will cut down the late-payment penalties and interest that continue to accrue each month.
Streamlined installment agreements are typically available if your balance is $25,000. You can also get a streamlined agreement if you owe $50,000, pay by direct debit, and have not defaulted on a prior installment agreement.
Personalized Installment Agreements
If you can’t afford the payment required by a streamlined installment agreement, you’ll typically need to complete a Collection Information Statement. This gives the IRS detailed financial information to show how much you can afford to pay each month.
The IRS may expect you to sell or borrow against your assets and make a lump sum payment, if possible. Doing this can reduce your balance and make your monthly installment agreement payment more manageable.
If there’s simply no way you can pay off your balance by the CSED, you could negotiate a partial payment installment agreement. An Offer in Compromise may also be an option in these situations. The IRS will want to know every detail of your financial situation, and they’ll still want you to pay whatever you can.
Get help finding a repayment plan that works for you by speaking with a tax resolution attorney.
Contact The Gartzman Law Firm to speak with an Atlanta installment agreement attorney about your case. Request your consultation by calling (770) 939-7710.