Facing collection efforts from the Internal Revenue Service (IRS) can be stressful. While there are penalties that can come with failing to address a tax dispute, there are also ways to resolve these issues in a way that is more appropriate for your current ability to pay.
One of the tools used to resolve tax controversies is the installment agreement which involves working out a payment plan with the IRS. The IRS is not obligated to accept this type of agreement but a dedicated IRS collections attorney could help you assemble the necessary information and suggest a plan that works to the government’s satisfaction. Let a Rockville installment agreement lawyer from Pontius Tax Law help you resolve your tax issues.
An installment agreement is one of the methods the IRS often uses to resolve tax controversies and have the taxpayer come into compliance. It is also one of the options that is most likely to be available to a taxpayer, given that the end result is the IRS recovering everything they are owed.
An installment agreement—also commonly referred to as a payment plan—is an agreement between a taxpayer and the IRS to pay all the tax that is owed in a reasonable timeframe. This agreement involves the taxpayer making monthly payments to the IRS in an effort to pay the full balance of what is owed. In some cases, the government may decide on a different interval than monthly payments.
Without an agreement in place, taxpayers will owe the full amount of their debt right away. For many individuals or businesses, this may not be possible, either because they do not currently have the money, or because it would invoke unnecessary hardship. With an installment plan, the taxpayer has the opportunity to pay back the debt over time. These agreements generally have a final deadline and the full amount owed must be paid before that date.
However, if full payment is not possible before the 10-year collection statute of limitations expires, and the taxpayer has some ability to pay, the taxpayer can enter a partial pay installment agreement. The IRS will review this partial pay installment agreement every two years to see if the taxpayer has an increased ability to pay the IRS. A Rockville attorney could assist a taxpayer in formulating this plan and getting it approved by the IRS.
There are benefits for taxpayers that reach an installment agreement with the IRS. The most important benefit is that when these agreements are accepted, the government will stop any efforts at collecting. That means efforts to levy bank accounts or impose a lien could be paused, and wage garnishments could be suspended.
It is necessary to keep up with the terms of the installment agreement to avoid a restart of collection efforts in the future. A Rockville installment agreement attorney could help ensure that the payments are made on time and that all other conditions are met. As long as the taxpayer complies with the terms of the agreement, they should not be subject to any other collection efforts related to this debt.
Many of the benefits of an installment agreement are in place simply by requesting a plan from the IRS. Typically, the IRS will suspend collection efforts as long as a payment plan is pending. That means that they will not issue levies and their time to collect is suspended, pending a decision on the installment agreement.
An installment agreement request is considered pending until a final decision is made, and that can take some time. During this period, a taxpayer could consult with a lawyer regarding the best way to manage their payments in the event that the plan is approved.
Even if the installment agreement request is ultimately denied, the benefits that come with seeking one will not fade immediately. The IRS will typically suspend all collection activities for 30 days following notice of the denial.
Installment agreements are a viable option for resolving a tax debt. These agreements could allow you to resolve your conflict with the IRS and also pay them back on your terms. While taxpayers with less than $50,000 at issue can usually request an agreement on their own, an individual or business with more than that should work with a Rockville installment agreement lawyer. Call right away to learn if you qualify for this process.
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.