IRS stands for National Internal Revenue Service and allows taxpayers to repay debts little by little through installment agreements. Since the taxpayer repays the debt through an installment agreement, interest may also need to be paid. The interest rate is usually between 8 to 10% a year. Therefore, if a taxpayer has money to pay off the debt, he is advised to pay it immediately instead of using an installment agreement because of the applicable interest.

Some ways that taxpayers can pay in installments include salary deductions, direct debits, check or money orders, electronic federal tax systems, online payment agreements, and the use of credit cards. Having an IRS installment agreement can not only solve a situation like this, because if the taxpayer pays according to the partial payment installment agreement, the taxpayer can revoke his installment agreement and the final situation of the IRS can change any time. If the IRS also finds out that the taxpayer lied in providing inaccurate information in his or her form, the IRS could also cancel the installment agreement. If the taxpayer does not pay taxes after submitting the installment agreement, the IRS can also make sure that the agreement is revoked. The types of installment agreements that are provided by the IRS are discussed below.

        

GUARANTEED PAYMENT PLAN (GIA)

The IRS will only agree to the use of this installment agreement by tax payers if they owe about $10,000 or less (excluding penalties and interest). Also, tax payers must meet the following criteria:

All taxpayers along with their spouses should have filed and submitted their tax return forms from the last five years.

Taxpayers should not be in bankruptcy.

The taxpayer should have not had an installment agreement for the last 5 years.

The taxpayer must agree to pay the installments on time.

The taxpayer must agree to pay his debts within the next 36 months from when the agreement begins.

The taxpayer should have had no record of late payment for the last five years. This does not include extension of file time. This also means that when the taxpayer misses the deadline, no action is taken.

The most important benefit of a guaranteed installment agreement is that the IRS will not file a federal tax lien on tax payers for their unpaid taxes. The IRS reports tax liens to the tax bureau, which will affect the credit score of taxpayers in a negative way. If the property related to the lien is to be sold, the IRS is paid first. The IRS divides tax debts of taxpayers (including penalties and interest) by 36 months to get the amount they pay according to this method. If taxpayers want to repay their debts before 36 months, they can also do that.

        

Steps to request a guaranteed installment agreement

Apply for a guaranteed installment plan online using OPA. This is the Online Payment Agreement and it is provided by the IRS.

Get the Form 9465 and fill the form. Mail your application to the address that will be provided on the form. A copy of your tax return should be included also.

Note how much you will be able to pay monthly. This payment should cover balance, interest and penalties within 36 months.

Choose a date for your payment that works with what you have budgeted.

A set-up fee should be submitted with your first payment. This fee is not fixed but the cheapest you will get is when you use OPA.

 

SIMPLIFIED INSTALLATION AGREEMENT (SIA)

If the conditions of the guarantee agreement are not met, the reduced agreement may be suitable for you. If your debt is less than $50,000 or equal to it, you can apply for this agreement. But the taxpayer must repay the debt in less than 72 months or less. The streamlining of the agreement is part of the IRS new start up plan, which is designed to help taxpayers pay their taxes. Before the new start, the IRS can only increase the streamlining agreement if the debt is $25,000 or less and the taxpayer agrees to repay the debt within sixty months.

       Like other agreements, the IRS will require taxpayers to submit all tax returns, but if they are late, the taxpayer will have to promise to pay on time and pay taxes on time from that day. Just like the guarantee agreement, the main goal of the simplified agreement is that the IRS will not continue to submit federal liens to pay you, or they will ask you to fill out financial statement forms to let the IRS know your income and expenses.

 

PARTIAL PAYMENT INSTALLATION AGREEMENT (PPIA)

If the guaranteed payment or simplified payment does not meet your budget, you can get a better discount from the partial payment installment agreement. This is a payment method. You can pay monthly installments based on your affordability after considering all monthly bills. The installment plan is different from the guaranteed and simplified installment plan because it covers a longer repayment period, and the IRS can submit a federal lien to help them recover their debt in full. Taxpayers must also fill out financial statement forms to help the IRS understand the average income and cost of living for the past three months. If you own your own assets, you will be required to provide a bank statement and confirm any equity.

 

 

 

NON-SIMPLIFIED INSTALLMENT AGREEMENT

If your debt exceeds $50.000, you will have to negotiate your installment agreement plan with the IRS. You may need the assistance of a tax professional. If you want to repay debts for more than five years or you don’t meet any other requirements of other plans, you can apply for a non-lite plan. This type of installment plan is directly negotiated with the IRS agent and then passed to the IRS manager for review and approval. The IRS will also file a federal tax lien and request financial statements.

 

DIRECT DEBIT IRS INSTALLMENT AGREEMENTS (DDIA)

These are INSTALLMENT AGREEMENT where monthly payments are taken out of your bank account. It is as simple as it seems.

 

HOW TO DELETE TAXES

Tax liens are proposed for taxpayers who cannot fulfill their tax obligations. If, when paying outstanding debts, a better and successful offer is provided, the IRS will obviously cancel the tax lien. Lien has ten years of regulations that can expire after that time. The two ways to cancel federal tax liens are revocation or release.