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Individuals or businesses might seek an installment agreement with the Internal Revenue Service (IRS) when they are unable to pay their tax liability in full when due. This allows a taxpayer to pay off their tax debt over an extended period, typically through monthly payments.
A Bethesda lawyer can communicate directly with the IRS to request an installment agreement. Our Enrolled Agents and former Revenue Officers understand IRS procedures and regulations, enabling us to potentially advocate for reduced monthly payments, extended payment periods, or even the potential abatement of penalties.
If you owe the IRS money but are unable to pay the full amount immediately, you may be eligible for an installment agreement, which allows you to pay off your tax debt over time through monthly payments. Taxpayers whose balance is under $50,000 can usually request agreements on their own, without legal counsel. Situations with more than $50,000 at issue could benefit from a legal professional.
Our Bethesda attorneys are skilled negotiators and can represent you in all communication with the IRS if you are seeking an installment agreement. We can pursue the most favorable terms for your agreement, and intervene to stop aggressive IRS collection actions.
This option is designed for taxpayers who owe more than $50,000 or those who do not qualify for other installment agreements. You must be able to pay the total balance, including penalties and interest, before the Collection Statute Expiration Date (CSED), which is usually 10 years from the date of assessment.
The IRS will review your financial situation (income, expenses, assets) to determine your ability to pay. In some cases, the IRS may approve a non-streamlined agreement without extensive financial disclosure, particularly for individuals who owe less than $250,000 and have not defaulted on previous agreements.
Taxpayers who are unable to pay their tax debt in full, even with an extended payment plan, and who can prove financial hardship may qualify for a PPIA. You will need to submit detailed financial information to the IRS, and you must agree to pay the maximum amount you can afford based on your financial situation. The IRS will periodically review your financial situation to see if your payments can be adjusted.
Entering into an installment agreement prevents actions like wage garnishments, bank levies, and asset seizures, as long as you adhere to the terms of the agreement. This can provide crucial relief and allow you to stabilize your financial situation, and break down your tax debt into predictable monthly payments.
Depending on the type of installment agreement and the amount owed, you may be able to avoid the filing of a Notice of Federal Tax Lien. A tax lien can negatively impact your credit score and ability to obtain loans. While interest continues to accrue on the outstanding tax liability, the IRS may reduce the failure-to-pay penalty rate once you enter into an approved installment agreement, provided you filed your return on time.
We offer a crucial layer of support to taxpayers struggling with IRS debt, potentially leading to more favorable outcomes and greater peace of mind throughout the legal process. We can also help you follow the terms of the agreement and provide guidance on preventing future tax problems.
If the IRS rejects your installment agreement request or proposes to terminate an existing agreement, our Bethesda lawyers can help you understand your rights and responsibilities, and file an appeal to challenge the decision. Contact Pontius Tax Law today to request your confidential case evaluation.
Pontius Tax Law, PLLC is a tax law firm that strives to resolve sensitive tax problems through trust, dedication and value. The law firm was founded by John Pontius with offices in Washington, DC, Rockville, MD, Bethesda, MD, Fairfax, VA, and Alexandria, VA. Mr. Pontius represents individual and business clients with sensitive and serious tax matters before the Internal Revenue Service and state taxing authorities. His client base is local, national, and international.
Over the course of his career, Mr. Pontius has represented businesses and individuals with complex tax issues in the following areas: FBAR examinations, offshore and domestic disclosures, FATCA, FIRPTA, tax planning, unfiled tax returns, release of tax liens and levies, trust fund recovery penalty, IRS and state audit examinations, as well as appeals, penalty abatement, U.S. Tax Court litigation, along with defense of tax fraud and evasion. If you require assistance from a tax lawyer, contact Mr. Pontius to discuss your situation.
