Sacramento Law Group

  • Home
  • Bankruptcy
    • Chapter 7
    • Chapter 13
    • Chapter 11
    • Bankruptcy Law
  • License Defense
    • RCFE
    • Automotive & SMOG
    • Child Care
    • Contractor
    • Adult Residential Facility
    • Family Child Care Home
    • Foster Family Home
    • Nursing
  • Divorce
  • More
    • Tax
    • Cannabis Tax
    • Probate
    • Dog Bite
    • Immigration
    • Caregiver
    • Employment
    • Real Estate
    • Car Accident
    • DUI
    • Personal Injury
  • Blog
  • Contact

IRS Installment Agreement

Jin Kim Tax Lawyer

Jin Kim
Tax Attorney
Law Office of Jin Kim
(916) 299-9913

The Covid-19 pandemic has drastically altered many taxpayers’ finances. As much as possible, many taxpayers want to minimize their expenses. Others have assets, yet do not want to liquidate them to pay their tax liabilities. Whatever their reasons are, tax debt is not easily avoided without interest, penalties, and collection. The good news is that taxpayers have options for repaying their tax liability. 

Suppose you received a notice for federal tax lien (NFTL) or notice to levy, and you plan to request a CDP hearing for reconsideration on your tax liabilities; consider raising an “installment agreement” as a resolution.    

Advantage of Installment Agreements 

Many taxpayers find installment agreements advantageous to them. The good thing about installment agreements is that they are generally favored by the IRS because they result in full payment of the tax liability. In contrast, offers in compromise can be difficult to secure and generally require a greater upfront cost. That being the case, most taxpayers can obtain an installment agreement without the need for a CDP hearing.    

However, as a caveat, if you wish to obtain an installment agreement, you must meet the “full compliance rule.” Also, you must demonstrate that you will comply with the withholding obligations during the installment agreement period and not use the under-withholding to fund the installment agreement, merely exchanging one liability for another. The taxpayer must be consistently tax compliant for the entire term of the installment agreement or it will default.  

Qualifications  

The Internal Revenue Manual (IRM) 4.20.1.4.1 provides the qualifications a taxpayer must meet to qualify for an installment agreement. If you are one of the following taxpayers, you may be eligible for an installment agreement:  

  • Individual taxpayers, which includes sole proprietorships, with no delinquent employment taxes 
  • Out-of-business BMF entities 
  • Corporations and other BMF entities,  

In addition to being one of the taxpayers listed, to be eligible for an IRS installment agreement the following criteria must apply:  

  • Your tax returns, including employment and excise tax, must be current. All your necessary period deposits (FTDs and/or estimated payments) must also be current.   
  • Your Installment agreements must include the total amount you owed, including civil penalties.  
  • You must be able to pay the minimum acceptable payment. However, you may also pay the maximum amount you can pay at the examination closing and each month after that. If you pay to reduce the balance to within the installment agreement criteria, it will be processed as an advance payment of the deficiency.  

Types of Installment Agreements  

The type of installment agreement you may secure depends on the taxpayer’s income tax deficiencies. Authorized installment agreements are the guaranteed installment agreements and the streamlined installment agreements.  

Under a guaranteed installment agreement, an individual taxpayer with income tax deficiencies of $10,000 or less (excluding penalties and interest) can pay within 36 months. On the other hand, taxpayers with tax deficiencies of $50,000 or less (including tax, penalties, and interest) can pay within 72 months under the streamlined installment agreement.   

Free Consultation

To learn more about your ability to obtain an installment agreement, contact Sacramento Law Group LLP tax attorney Jin Kim at (916) 299-9913 to schedule a free consultation. Through an installment agreement, you may be able to stop IRS collections, tax liens, and IRS levies.

Ask The Attorneys

    Meet The Attorneys

    Adam

    Jin Kim

    Call For A Consultation

    (916) 596-1018

    Mon - Sat 8 AM - 6 PM

    Disclaimer

    We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code. The information contained in this website is for informational purposes only and is not legal advice. Furthermore, the information contained in this website is not guaranteed to be up to date, accurate, or complete. An attorney-client relationship can only be established by signing a representation agreement.
    • Bankruptcy
    • Terms of Use
    • Disclaimer
    • Sitemap
    • Listings
    • Sacramento Offices For Rent
    *$900 Chapter 7 Bankruptcy Fee Disclaimer: While most cases qualify for the above fee, some cases are complex. Consequently, the above fee is only a sample fee (not a specific or guaranteed fee) and is subject to change at any time due to the necessity of charging more for complex cases. The sample chapter 7 fee represents the typical fee for a simple no-asset chapter 7 case. The $900 fee is only available to residents of the following counties: Sacramento, Placer, Yolo, Solano and San Joaquin. Residents of other counties may be charged more.