New Relief Provisions to IRS Installment Agreements (Payment Plans) – Fresh Start Initiative 27 November 2012 by Mitch Helfer

Taxpayers who can’t afford to pay income taxes often request a payment plan or installment agreement to pay their taxes. An installment agreement is a payment option for those who cannot pay their entire tax bill by the due date. Once an IRS Payment Plan (also known as an Installment Agreement) is established, the IRS will not enforce collection action, including the levy of bank accounts or wages, as long as you remain current with all filing and payment obligations.

Beginning March 2012, the Fresh Start Program will give more taxpayers the ability to use streamlined installment agreements to catch up on back taxes and also more time to pay. Some of the major highlights of this new change are:

  • The new threshold for requesting an installment agreement has been raised from $25,000 to $50,000.
  • This option requires limited financial information, meaning far less burden to the taxpayer.
  • The maximum term for streamlined installment agreements has been raised to six years from the previous five-year maximum.

If your debt is more than $50,000, you’ll still need to supply the IRS with a Collection Information Statement (Form 433-A or Form 433-F). You also can pay your balance down to $50,000 or less to qualify for this payment option.

With an installment agreement, you’ll pay less in penalties, but interest continues to accrue on the outstanding balance. In order to qualify for the new expanded streamlined installment agreement, you must agree to monthly direct debit payments.

If you cannot afford to make monthly payments or do not qualify for an IRS installment agreement, we can help you qualify for another type of tax relief, such as an offer in compromise, abatement of penalties due to reasonable cause, analyzing the statute of limitation to assess and collect, or negotiating that your account be placed in a “currently not collectible” status so that you will not be required to make payments and the IRS will not pursue collection action.

For more information on installment agreements, please call us for a free, confidential consultation. If you are searching for a highly qualified representative to negotiate on your behalf with the IRS or a state tax agency, we offer our services with the highest levels of quality and professionalism. We will negotiate to setup the lowest possible payment plan or defer collections based on a financial hardship. Whether you owe millions of dollars or only several thousand, we can help you reach a resolution on your back taxes and obtain a fresh start towards financial freedom.