Installment Agreement Requests
If you are unable to pay the full amount that is due with your income tax return, the IRS may allow you to make monthly installment payments. It is important to remember that you will be charged interest and possibly a late payment penalty on the tax amount unpaid, even if the IRS approves your installment agreement requests.
If your installment agreement requests are approved by the IRS, you will also be charged a fee. Remember, to limit any interest or penalty charges, pay as much as the tax liability as possible with your return.
When asking for installment agreement requests, you will need to fill out the Tax Form 9465. The IRS should respond to your request within 30 days. If the IRS approves your Installment Agreement Requests, you will receive a notice that details the terms of your agreement and a requesting fee. Keep in mind that your installment agreements requests will always be denied if you haven’t filed your tax returns.
If the IRS approves your Installment Agreement Requests, in return you are making an agreement to make your monthly payments on time and to meet your future tax liabilities. In order to meet your future tax liabilities, you need to have enough withholding or estimated tax payments to make sure your future tax liability is paid in full when you file income taxes in the future. If in the future, you receive a tax refund, it will be applied to the amount you owe the IRS.
The IRS accepts checks, money orders and credit cards. After each monthly payment you make with the IRS, they will send you notices showing the remaining balance and the due date of your next payment. However, if you make automatic payments every month, you will not receive monthly notices.
If you do not make your payments on time as agreed upon or fail to pay a balance due on a return you file later, the IRS can file a “Notice of Federal Tax Lien” or an IRS Levy in order to collect the money you owe.
Though it may seem simple to apply for Installment Agreement Requests, dealing with the IRS on your own can be very difficult. We recommend seeking a professional tax advisor to help you with your tax problem and the IRS. Contact community Tax today should you find yourself behind on your taxes or in trouble with the IRS.