Why Hire Tax Professionals Before Applying for an Installment Agreement?
An installment agreement with the IRS allows you to pay your tax debt over time rather than in one large lump sum. For many who do not have thousands of dollars lying around, this is a very appealing opportunity. You can minimize the impact of trying to pay your debt all at once by paying your tax debt off monthly like you pay credit card debt. There are some important facts to keep in mind if you are thinking about pursuing an installment agreement:
1. An installment agreement does not eliminate the interest and penalties that you owe the IRS. You are still responsible for paying the full amount of the debt (including all of the interest, penalties and fees).
2. You must request that the IRS consider granting you an installment agreement by using Form 9465. There are many ways to make this request. You can include it with your annual tax return, apply online or even over the phone.
3. There is a fee to establish your installment agreement if it is granted by the IRS. Normally this fee is fairly small: $120 if you elect to pay via payroll deduction. If you set up a payment that directly debits from your bank account, the fee is reduced to $52.00.
4. By law, the IRS is given only 10 years to collect what you owe to them. So, when an installment agreement is set up, you will have pay enough per month to settle your debt in this 10-year period of time.
5. You should plan to pay as much as possible each month toward your tax debt because you are still accruing interest and penalties. Just like a credit card, the longer it takes to pay, the more money you will give to the IRS.
Instances Where Hiring a Professional Is In Your Best Interest
The IRS is fairly generous about granting an installment agreement to individuals in need, but there are instances where it is definitely in your best interest to hire a tax professional to work on this request on your behalf. Communicating directly with the IRS can be extremely stressful and a tax professional can take the burden of communication off of your shoulders.
The more money that you owe the IRS, the more complicated it can be to request an installment agreement. If you apply, you want to be sure that you have the best possible chance of getting it approved, and a tax professional can ensure that you are putting in the strongest application. A tax firm can also review all of your returns and make sure that you that you really owe what you (and the IRS) think you do.
Success Tax Relief is a full service tax firm that can help you make your strongest possible case for getting an installment agreement approved by the IRS. We’ll help you determine how much you should pay each month and how long you should request that the installment agreement extend. We can handle all communication with the IRS and take away all of the headaches. If you are interested in learning more about whether you might qualify for an installment agreement, give us a call today at 1-877-825-1179.