Can You Have 2 Installment Agreements With The IRS?

Can You Have 2 Installment Agreements With The IRS?

Those taxpayers with unpaid tax bills don't have to be nervous. They need to pay their taxes. Generally, if you are unable to pay all of the taxes you owe in full, but you still want to try to pay them, the IRS may allow you to make installments on your tax payments.

If you had an installment agreement for taxes that you owed in previous years, and couldn't pay the taxes you owe this year, you would have to pay all of the back taxes. Can you still apply for a second agreement?

The IRS does not have to give you multiple installment agreements for each year. They are required to do this only once for the entire outstanding tax debt.

An unpaid tax balance due will immediately cause your current installment agreement to enter into default status.

A consolidated installment agreement combines all the taxes and interest owed for both amounts owed.

Despite the installment period, interest and taxes on the outstanding balance will accumulate until payment is fully made.

If you want to apply for an installment agreement with the IRS, you will need the following:

  • Your most recent tax return.
  • Your bank account details with your account number.
  • Your contact details.
  • The amount of unpaid taxes that are due.

You can apply for a payment plan if your total tax liability is less than $50,000, including penalties and interest. To apply, you will need to download and complete a few forms and return them in the mail.

What Are Your Options If You're Unable to Pay the IRS Payment Plan Total Amount After Adding New Tax Debt?

If you’ve got a significant tax debt, an extension may not be a viable option, and you might need to find other ways to get this behind you. In this situation, you can submit an offer in compromise (OIC). Yes, you can potentially reduce the amount of taxes owed to the IRS simply by settling your tax debt for an amount less than what is actually due. This could result in a significant deduction from your unpaid taxes! After you've taken care of the reduced tax amount, the IRS will view your taxes as paid in full and will no longer attempt to collect on them.

Can You Have 2 Installment Agreements With The IRS?

What Is The Process For An IRS Installment Agreement?

Tax problems are a serious problem. The IRS is very thorough about collecting what’s due to them, and they often make it a priority over other creditors.

As a taxpayer, you must pay your taxes on time. If you don’t pay taxes, your business can face penalties and even criminal charges. Also, intentionally avoiding tax payments may be considered a crime.

The IRS will take increasingly forceful steps to recoup what you owe them.

You are unable to obtain two installment agreements with the IRS, however, a payment plan offers you protection against further collection procedures and an opportunity to pay off your debt. There exist two approaches for entering into an installment agreement with the IRS:

1. Short-term payment plan:

A payment plan that requires you to make full payment in one or more lump sums within 180 days.

2. Long-term payment plan:

Make a series of payments over time to pay off the debt, with installments that can range from 180 days up until when the sum is fully paid and its statute of limitations has expired.

An installment agreement can be set up entirely online or via mail or phone. You can also set up an installment agreement in person. r, short-term payment plans can only be set up via mail or phone.

If your current tax debt is over $50,000, you will unfortunately not qualify for a monthly payment plan. However, if it's between 25k and 50k dollars then the only way to pay off this debt is through Direct Debit. Keep in mind these limits when planning how to best manage your finances!

If you want to take advantage of a payment plan, there are certain strict requirements that must be met. Furthermore, if you wish to stay in good standing and avoid defaulting on the payments, it is essential for you to pay close attention to all details outlined.

What Is The Process For An IRS Installment Agreement?
What Are The Requirements For IRS Installment Agreement?

What Are The Requirements For IRS Installment Agreement?

You must be completely current on your taxes and you must have a file ready for your accountant if he or she asks for it.

It’s important to file your taxes even if you are unable to pay your taxes because the IRS will not accept any installment payments until all of your returns are filed and the IRS will start sending out notices regarding your tax

The IRS will review the last three years of tax returns to determine if you qualify for an Installment Agreement.

Missing your payment due date or accumulating additional tax debt without asking that it be added to your prior balance can result in a default. To ensure you don't rack up any unnecessary costs, many low-income taxpayers are eligible for setup fee waivers. In addition, here are some other helpful tips:

Make sure to pay your minimum monthly payments on time.

To maintain your installment plan, ensure that you submit all subsequent returns on time.

Take heed that all future tax refunds will be redirected to paying off your debt until it is fully paid. Despite its resemblance, stimulus checks or Economic Impact Payments sent out by the Treasury and IRS have not considered tax refunds.

Repercussions for Avoiding Payment of Taxes Due

If taxes are not paid, the IRS will take drastic measures to ensure repayment. This could include filing criminal charges, freezing your bank accounts, garnishing wages, and placing liens on all of your assets. Making timely payments is essential in order to avoid these extreme consequences by the Internal Revenue Service.

The Advantages Of Working With A Tax Attorney

Managing taxes can be a daunting task, and anxiety often arises when the IRS is requesting back payments. In most cases, enlisting the aid of an experienced tax attorney should prove beneficial. This not only relieves stress but also grants you access to an expert who understands all facets of your unique situation - ensuring that it's handled in accordance with current legal standards.

A professional tax lawyer will assess how much you owe and ensure that any actions taken by the IRS are legitimate.

With their supreme knowledge and negotiation techniques, experienced tax lawyers can go to battle against the IRS on your behalf. They will work relentlessly to defend you from any potential actions taken by Revenue Officers.

If you're struggling with tax debt, a skilled tax lawyer can help guide you through the resolution process and minimize costly missteps. Furthermore, they may be able to broker a more lenient settlement via an Offer in Compromise or partial waiver of your obligation. Additionally, these professionals are often equipped to guard against garnishment or liens being placed on your assets.