Paying of taxes owed is simple only when you can pay the total amount of taxes you owe in lump sum. As most taxpayers’ financial situation does not allow them to pay the entire tax debt in a single payment, they need to choose an IRS tax debt payment plan to pay back their back taxes. Among the four payment plans namely Offer in Compromise, Installment Agreement, Currently Not Collectible and Partial Payment Installment Agreement, most taxpayers apply and qualify for Installment Agreement.
Under Installment Agreement, taxpayers can pay the taxes they owe in fixed monthly installments. Only those taxpayers that have the financial capability of paying a certain fixed amount sustainably over a period of time should apply for this payment plan.
Taxpayers must know that the IRS charges interest on any amount of tax that remains to be paid along with penalty for non-compliance. The IRS also charges penalty if you apply for a payment plan you clearly do not qualify for. To negotiate the terms and conditions of Installment Agreement, taxpayers may take the help of tax resolution services.
Taxpayers may benefit from hiring a tax help in getting IRS penalty reduced or removed, reducing the interest on the tax debt, and in getting matched with the most appropriate tax debt payment plan. A tax help will analyze, prepare and negotiate a case of tax debt to reach a resolution that provides you the most benefits.