Using Installment Agreements Effectively

When IRS payments become an issue for you, your family or business, you should contact the tax lawyers at Frost Law. We can guide you through an examination and completion of collection information statements such as Form 433A and Form 433B, the Form 433F financial information statement and Form 9465 installment agreement request.

If a taxpayer cannot pay the tax owed in full, the taxpayer has the option of setting up an installment agreement. The IRS is generally prohibited from taking collection action (except the filing of a Notice of Federal Tax Lien) when an installment agreement proposal is pending, or when an installment agreement is in force.

This important tool protects a taxpayer from a bank levy, wage garnishment and seizure of property. The same arrangement can be worked out with state taxing authorities.

The IRS has recently announced a set of relaxed rules on setting up installment agreements for individuals owing between $25,000-$50,000. The IRS will no longer require a financial collection information statement (Form 433-A or Form 433-F) for these taxpayers, and will allow them to setup streamlined installment agreements. This only applies if the taxpayer is willing to set up a direct debit installment agreement.

The IRS has developed a new form — 9465-FS, to be used for taxpayers meeting the above criteria. Additionally, the IRS will allow taxpayers the opportunity to pay the balance over a 72 month period, as opposed to the 60 month period that has been traditionally offered.

Every Tax Problem Has A Solution — Lawyers at Frost Law Can Help You Find Yours

When determining the amount of an installment agreement, the IRS reviews the completed collection information statement and determines the taxpayer’s ability to pay. It is important to note that the IRS has national and local standards for many of the expenses listed on these forms. Often, collection personnel at the IRS will persuade taxpayers who are not familiar with these forms or the Internal Revenue Manual that certain expenses they are claiming are not allowed.

As a result, many taxpayers will find the amount the IRS is saying they can pay is out of line with their current budgets. Tax lawyers at Frost Law can strive to negotiate a payment arrangement that is much more reasonable.

For taxpayers owing less than $25,000 in taxes, interest and penalties, taxpayers can use the online payment agreement (OPA) or call the number on the IRS bill or notice.

Use an installment agreement strategy that can put your IRS legal crisis behind you. Find out more about the quality services awaiting you at Frost Law by calling (202) 618-1873 or completing the brief contact form. Get your free initial consultation today.