“Did you Know?” #16

DID YOU KNOW the IRS will allow you to pay your balance in an installment agreement?

Tax season has wrapped up, leaving some taxpayers with a balance due. If you have a balance due that you cannot pay in full, the IRS will usually allow you to set up an installment agreement to pay the amount due spread out over up to 72 months. Keep in mind that the interest and penalties will continue to accrue, but if you enter into an installment agreement and make the required payments on time, the IRS will consider you to be in “collection compliance.” Your future tax refunds will continue to apply to the balance until it is paid, but you won’t need to worry about collection agencies or bank levies. You will need to have all of your returns filed for the past six years before you can set up this agreement.

Some taxpayers can enter this agreement by going into their account at www.IRS.gov, typing “installment agreement” in the search box, and entering their banking information for direct debit, saving much time. If that doesn’t work, a phone call to IRS collections will be needed. This may require a long hold time, so leave a good amount of time for this call.

Our Low-Income Taxpayer Clinics can help with balances owed. Please set up an intake with one of our practitioners if you need assistance!