Tax Debt Relief through Installment Agreement
Last updated on October 10, 2022
There are various ways to achieve tax debt relief, but for taxpayers that have sufficient finances to pay the entire tax debt, but not in a lump sum can explore Installment Agreement. There are various kinds of Installment Agreements, including Guaranteed Installment Agreement, Streamlined Installment Agreement, and Partial Payment Installment Agreement.
Taxpayers can choose an appropriate Installment Agreement according to the amount of tax debt to be paid. The IRS looks to get the most in back tax, and they only qualify taxpayers for a payment plan if the taxpayers’ finances do not allow them full payment. To get the best resolution, taxpayers must explore all Installment Agreements before selecting one that suits them the best.
Under any Installment Agreement, the IRS determines the amount to be paid in installments based on the financial condition of the applicant. For taxpayers, it is best to pay as much as they can in monthly installments to minimize penalties and interest. The IRS continues to charge penalties and interest on any amount that remains to be paid even after a taxpayer has qualified for a resolution and has started paying tax debt. The faster taxpayers pay their tax debt, the smaller the amount they will need to pay.
Tax debt relief must be sought at the earliest to avoid IRS collection actions, and accumulation of penalties and interest. This allows the most favorable resolution of tax debt.
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