If a person is unable to resolve their tax debt within 30 days of the bill assessment, their debt will be classified as a Collection Case, and they will receive a Statement of Account notice. This notice will provide details of all known debts and the amount of liability that needs to be paid for each debt in order to bring your accounts into compliance.
If a person has any questions or needs assistance with making a payment, they can contact the appropriate tax authority. If a person is unable to pay their tax bills in full, they may be eligible for an installment payment agreement.
This arrangement allows people to make monthly payments toward their unpaid tax balance. To apply for an installment agreement, they can complete the installment agreement application available on the Compliance & Collections Forms webpage.
Once an application is received by the tax division, it will be reviewed, and the person will be contacted regarding the status of their request. The Offer in Compromise program provides an opportunity for financially distressed taxpayers who qualify to settle their tax liabilities by paying a reasonable portion of the total debt.
In certain exceptional cases, taxpayers who can demonstrate hardship may be granted a penalty waiver after paying all taxes and interest owed in full. If you believe your situation warrants a penalty waiver and you have already paid all taxes and interest, you can submit a letter by mail requesting the specific type and amount of the penalty and explaining the reasons for your request. Once your letter is reviewed, you will be contacted with further information.
The IRS Installment Agreement program also allows taxpayers to pay their tax debts in monthly installments if they are unable to pay the full amount at once. This program provides flexibility in managing tax liabilities and can help avoid more severe collection actions.
To request an installment agreement, you can use the Online Payment Agreement tool on the IRS website or submit Form 9465, Installment Agreement Request, by mail. The IRS will review your request and determine whether you qualify for an installment agreement based on factors such as your financial situation and the amount you owe.
When applying for an installment agreement, it’s important to accurately report your income, expenses, and assets to ensure that the monthly payment amount is reasonable and manageable for you. You may need to provide supporting documentation to verify your financial information.
Once your installment agreement is approved, you will be required to make monthly payments on the agreed-upon amount until the tax debt is fully paid. It’s important to make your payments on time to avoid defaulting on the agreement.
There may be fees associated with setting up an installment agreement, and interest and penalties will continue to accrue on the unpaid tax balance. However, entering into an installment agreement can help you avoid more aggressive collection actions, such as wage garnishment or bank levies.
If you are unable to pay your tax debts in full and do not qualify for an installment agreement, there may be other options available, such as an offer in compromise or currently not collectible status. Consulting with a qualified tax professional can help you understand your options and choose the best course of action based on your individual circumstances.
Please note that the information provided here is a general overview of the IRS Installment Agreement program, and specific details and requirements may vary. It’s always advisable to consult with a qualified tax professional or the IRS for personalized guidance and assistance regarding your specific tax debts.