Call for a free consultation
Call for a free consultation
(877) 777-7430

Installment Agreements

Our staff has extensive experience in negotiating Installment Agreements and assisting taxpayers with the paperwork that is necessary for obtaining an Installment Agreement.  We can assure you that we will NOT set you up for failure by agreeing to monthly payments that you cannot afford.

FREQUENTLY ASKED QUESTIONS

Yes. You must be in compliance with filing, meaning that all tax returns you or your business are required to file must be either filed or on a valid extension. If you cannot quickly get into compliance, contact an experienced tax relief professional to make sure you are not at risk of enforced collections (bank levies, garnishments, asset seizures, etc.).

Maybe. For small, individual tax liabilities, you might not need the assistance of a professional. However, for larger tax liabilities or for business tax liabilities, the assistance of a tax relief professional can make the difference between being “forced” into large monthly payments that can make it impossible for you to make ends meet and being granted affordable monthly payments that will allow you to meet the needs of yourself, your family, or your business.

Absent extraordinary circumstances, the IRS will not levy you while you are on an Installment Agreement.

Yes. Under most circumstances, a Notice of Federal Tax Lien will be filed even though an Installment Agreement is granted unless you qualify for a streamlined, guaranteed, or in-business trust fund express Installment Agreement. Contact an experienced tax relief professional to see if a Notice of Federal Tax Lien can be avoided given your circumstances.

The IRS can send you a Notice of Intent to Terminate your Installment Agreement. Contact an experienced tax relief professional immediately if this happens. Oftentimes, a professional can help you either avoid the default or quickly get your agreement reinstated. This is usually far superior to having to renegotiate a new installment agreement because you will be at an increased risk of enforced collections while your Installment Agreement is in default, and the IRS may be more reluctant to grant you another agreement because you defaulted.

Yes. Your Installment Agreement can default if you fail to file subsequent tax returns, if you accrue a new tax liability, or if the financial information you provided when you applied for your installment agreement was inaccurate. With some Installment Agreements, the IRS can periodically request updated financial information. If you have this type of Installment Agreement and you fail to respond to a request for updated financial information, your Installment Agreement can default.

Yes. With some Installment Agreements, the IRS may periodically request updated financial information. If your financial circumstances have
changed for the better, the IRS may increase your monthly payment. If you fail to respond to the request for updated financial information, the IRS can default your Installment Agreement.

Contact an experienced tax relief professional to see if your change in financial circumstances makes you a candidate for an Offer in Compromise

(tax settlement) or Currently Not Collectible Status (an agreement where you are not required to make any monthly payments). It may also be possible to negotiate lower monthly payments.

After we negotiate a manageable Installment Agreement on your behalf, we will stay by your side and protect you from default.  

We understand that unexpected expenses may “pop up” in the future and that there may be a month or two in which it is difficult or impossible to make your installment payment.  

Rather than defaulting your Installment Agreement and exacerbating your tax problem, simply give us a call before your payment is due.  Chances are, we can negotiate an extension for your payment or even make arrangements for you to “skip a month” without having your Installment Agreement default.

Ed Phillips
Ed Phillips
Cerritos, CA
Read More
"I thought I would be better off with local representation, but I couldn’t have been more wrong. After trying multiple ‘reputable’ local attorneys, I had gotten nowhere. This changed immediately when I engaged Fortress. Their professionalism was superior and they got the job done far more quickly than I expected. If you have state or federal back tax issues, you can’t go wrong with Fortress"

Attorneys vs Accountants
Which is Best for You?

Resolving your tax debt typically has very little to do with accounting, and everything to do with building and presenting a strong case.

Most CPA’s have very little experience, if any, resolving back taxes. Our attorneys do nothing but resolve back taxes, day in and day out.

Negotiation and persuasive skills, not number-crunching skills, get the best results when it comes to resolving back taxes.

Related Articles

How to Negotiate IRS Installment Agreements

State Tax & IRS Installment Agreements: 5 Keys to Negotiate

Over my many years representing taxpayers who are in collections, I have negotiated hundreds of IRS and State Installment Agreements. During this time, I have developed a list of important information I need from my clients in order to negotiate the best possible monthly payments for my clients’ unique conditions. Here, I will share my

How to Reduce Your IRS Tax Liability | OIC | TaxFortress.com

Top 5 Ways To Reduce An IRS Tax Liability

So, something in life or business didn’t go according to plan, and now you’re faced with an IRS tax liability. While few people relish being a collection target of America’s most formidable creditor, there may be a silver lining. You may have options which could significantly reduce the amount that you have to pay the

Default IRS Installment Agreement

Defaulted IRS Installment Agreement (CP523)

The CP523 notice of intent to levy intent to terminate your installment agreement is more or less saying that the agreement is in default and may terminate in 30 days.  If the agreement does terminate, involuntary enforced collection action will commence.  This could mean garnished wages, levied accounts receivable or levied bank accounts.  This could

IRS Uses Private Collection Agencies | FAST Act | TaxFortress.com

Congress Instructs IRS To Outsource Collections To Private Companies

On December 4th, 2015 President Barack Obama signed into law the “Fixing America’s Surface Transportation Act” to improve the Nation’s surface transportation infrastructure. Also referred to as the FAST Act, the legislation included a provision which requires the Internal Revenue Service to outsource certain tax debts to private debt collection agencies. The idea behind the

IRS Offer in Compromise | Fresh Start Initiative | Form 656

IRS Offer in Compromise: Common Challenges to Approval

You have read the Form 656, IRS Offer in Compromise booklet, the rules under the Fresh Start Initiative, and perhaps even hired an attorney or other representative to help you submit your Offer in Compromise to the IRS.  You feel you have sent in a complete Offer, with all documentation attached.  You feel the IRS should

IRS Payment Plan | Installment Agreement | TaxFortress

IRS Payment Plan & Installment Agreements

IRS Payment Plan | Installment Agreement | TaxFortressAny time a taxpayer incurs a balance due to the IRS, the IRS’s first response is almost invariably to demand that the debt be fully paid, immediately.  However, in many situations, the taxpayer does not have the ability to fully and immediately pay the tax debt.  This inability to quickly resolve the liability can lead to heavy-handed, enforced collection techniques, such as levies, garnishments, and seizures.  While some taxpayers will qualify for an Offer in Compromise (a tax settlement), oftentimes people or businesses who find themselves indebted to the IRS and unable to full pay will need to enter into a formal IRS payment plan called an Installment Agreement.  Once a taxpayer has entered into a formal Installment Agreement, the IRS will refrain from enforcement.

Eligibility Requirements for an IRS Payment Plan

In order to enter into a formal Installment Agreement, the taxpayer must satisfy the relatively basic threshold requirements of filing compliance and deposit compliance.  Filing compliance requires that the taxpayer be up-to-date with filing all required tax returns (or be on a valid extension).  To be in deposit compliance, the taxpayer must be making all required Federal Tax Deposits in full and on time (if applicable).  If, for whatever reason, the taxpayer cannot get into filing or deposit compliance immediately, he or she is ineligible for an Installment Agreement and may be at an enhanced risk of enforcement.  An experienced tax attorney can oftentimes reduce or eliminate the risk of enforcement for a period of time until the taxpayer becomes eligible for an Installment Agreement.

Once a taxpayer meets the eligibility requirements for an Installment Agreement, negotiations toward a formal Installment Agreement, if performed properly, can protect the taxpayer from enforced collections until such time as the Installment Agreement is approved.

Assuming a taxpayer can attain filing and deposit compliance, he may be eligible for a Guaranteed, or Streamlined Installment Agreement.  Those types of agreements do not require extensive financial review, but they do require a relatively low balance due.  In many instances, the IRS will not notify a taxpayer that he qualifies for a Guaranteed or Streamlined Installment Agreement.  This is another area where a tax professional can be of great assistance.

But what if the taxpayer does not qualify for a Guaranteed or Streamlined Installment Agreement?  The Internal Revenue Manual requires that the IRS tailor any plan for resolution of a liability to the taxpayer’s “ability to pay.”  “Ability to pay” generally means “gross monthly income” minus “allowable expenses,” with the caveat that the IRS will also consider equity in assets when determining ability to pay.  This opens the door to the IRS demanding that the taxpayer take out a second mortgage, downgrade to a more modest home, liquidate retirement accounts, close a business location, scale back business operations, or any of several other uncomfortable and financially harmful demands.  A qualified representative can often negotiate an Installment Agreement without the taxpayer being required to make such drastic changes to the lifestyle he or she has worked so hard to attain.

In order to determine the ability to pay, the IRS requires significant financial disclosure and review (unless the taxpayer is eligible for a Streamlined or Guaranteed Installment Agreement).  The IRS will generally request a Form 433-A, 433-F, and/or 433B Collection Information Statement, along with verifying documentation like bank statements, cancelled checks, bills and invoices, etc.  At this stage, it is extremely important to have a representative who specializes in this type of negotiation.  A good representative will be able to review the financial documents with the eye of an IRS collection employee, and can advise on the best way to characterize the financials to truly reflect the taxpayer’s financial circumstances.

IRS Revenue Officers and collection employees have many strategies for finding every last penny to extract from a taxpayer on a monthly basis.  Using techniques such as challenging expenses as illegitimate, disallowing expenses deemed unnecessary, holding taxpayers to National Allowable Standards for Living Expenses, overvaluing assets, and disregarding revenue consequences from cutting business expenses, to name a few, the IRS fosters a culture of maximum extraction from a delinquent taxpayer.

An experienced and competent tax professional should be able to negotiate reasonable terms notwithstanding the IRS culture of maximum extraction.  On the other hand, taxpayers who try to negotiate non-streamlined Installment Agreements on their own or with the help of an incompetent professional can easily wind up paying hundreds or thousands of dollars more per month.  Agreeing to a monthly payment that the taxpayer cannot afford can prevent the taxpayer from making ends meet and can lead to the default of the Installment Agreement.  Default of an Installment Agreement should be avoided at all costs, as this tends to increase the chances of enforcement and decrease the IRS’s willingness to grant another repayment plan.  It is much better to get affordable monthly payments approved the first time around than to enter into an agreement with non affordable terms.

Upon receipt of all requested financial documentation, and any additional clarifying information, the IRS will make a determination whether to accept or reject a proposed Installment Agreement.  The IRS has to follow Independent Review and Appeals procedures when rejecting a properly prepared Installment Agreement proposal.  This is another instance where a qualified tax professional can be the difference between success and disaster.  You need someone who knows the rules that govern the IRS, has the experience to know which battles are worth fighting, and the know-how to exercise your rights on your behalf.

If the IRS accepts the proposed Installment Agreement, its terms will require that the taxpayer make his monthly payment in full and on time every month, as well as maintain deposit and filing compliance.  A formalized Installment Agreement removes the taxpayer’s case from Active IRS Collections, and allows the taxpayer to resolve the liability, free from the threat of unexpected and harmful levies, garnishments and seizures.

The above is but a brief and simplified explanation of Installment Agreements.  As a professional who represents taxpayers in collections, throughout any negotiation, I must constantly anticipate the IRS’s next move and outflank their collection efforts.  A successful negotiation takes a significant amount of time, attention, follow up, and knowledge.

IRS Tax Professionals

Need Answers?

Do you have questions about back taxes? Our experts focus on nothing else but resolving your tax liabilities.

Contact us now!
(877) 777-7430

Get a Free Consultation

  • This field is for validation purposes and should be left unchanged.
For a Free Consultation