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If you owe federal tax that you cannot pay immediately, you have options. Many taxpayers qualify to pay their back taxes in monthly installments.
If you have significant tax debt that you acknowledge but cannot pay at the moment, speak with a Fairfax installment agreement lawyer at Pontius Tax Law. Our trained IRS collections attorney or another tax professional on our team can help you devise a payment plan that the Internal Revenue Service (IRS) is likely to accept.
If you filed a tax return but did not pay the total amount owing, you will receive a notice from the IRS demanding payment. A letter will come every few weeks until you resolve the matter or the IRS becomes aggressive in their collection efforts.
If you ignore the notices because you do not currently have the money to pay what you owe, the IRS may take steps to enforce your debt. These might include garnishing your wages, seizing your bank account, or intercepting your tax refund.
On the other hand, if you respond promptly to the notice, the IRS is often willing to work with you. Paying in monthly installments requires you to pay interest and penalties, but the IRS will halt its enforcement efforts as long as you adhere to the agreement. If you owe the IRS $50,000 or more, a Fairfax attorney could review your case to determine whether you qualify and whether a payment plan is the best option to come into tax compliance.
Individual taxpayers who owe less than $50,000 and businesses owing less than $25,000 can usually set up an installment agreement on their own. You request an installment agreement by submitting Form 9465 online, or you may be able to complete the process over the phone.
You will not be eligible for a payment plan unless you have filed all your returns. You must file all future returns when due and pay all taxes owing each year. Failure to comply may cause the IRS to terminate the payment plan and resume collection efforts on the unpaid balance, plus interest and penalties.
You may take up to 72 months to pay off your tax debt, but interest continues to accrue during the payment period. If you owe more than $50,000 or if you cannot pay all you owe before the statute of limitations to collect the debt expires— 10 years from the date the taxes were assessed —seek help from a Fairfax attorney to set up a monthly installment payment plan.
When a taxpayer or business has a larger tax debt, payment plans are still possible. However, you may need to present substantial documentation proving that you need an installment plan to manage your tax debt and demonstrating you have the ability to comply with the arrangement.
If your financial situation does not allow you to pay the full amount owing before the ten-year statute of limitations expires, a partial payment installment agreement (PPIA) may be possible. Because some of your tax debt will remain unpaid, this is effectively a settlement agreement. The IRS only accepts PPIAs when other debt resolution options are unavailable.
It is wise to work with legal counsel to resolve larger tax debts. A Fairfax attorney could help you compile the information the IRS needs to evaluate your monthly payment plan proposal.
If you acknowledge your tax debt but cannot pay it all at once, paying it off over time may be a good solution. Contact a Fairfax installment agreement lawyer at Pontius Tax Law if you have significant tax debt you need resolve. Our team includes former IRS Revenue Officers, so we can offer sound advice based on first-hand knowledge of how the IRS works. Contact us to learn more about the value we can add.
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.
