Are you struggling to pay off your tax debt to the IRS? At Dallo Law Group, we help evaluate your specific tax situation and calculate the lowest monthly payment IRS will accept, providing you with a personalized installment payment plan that will help you get relief from your tax debt. Whether you owe a small or large amount, we can help you avoid IRS levies, wage garnishments, and tax liens.

Dealing with the IRS can be overwhelming and stressful. Our team of certified tax attorneys and CPAs has been helping individuals and businesses in San Diego for over 10 years to resolve IRS debt issues. Schedule a consultation with one of our experienced tax attorneys to see if an IRS installment agreement payment plan is an option for you.

What Is An Installment Agreement?

An installment agreement (payment plan) is usually the easiest solution to pay off taxes owed to IRS. An IRS payment plan provides taxpayers the ability to pay their tax liability over a period of time in monthly installments that are affordable and reasonable.

An installment agreement is a perfect option for taxpayers who are either unable to pay their tax liability in full as it comes due and do not qualify for an offer in compromise or currently non-collectible status.

How It Works: From Start To Completion

  1. Determine Your Eligibility: Determine which type of installment agreement is right for you based on the amount of taxes you owe, your ability to pay, and your current financial situation. Consider all options available and choose the one that fits your needs best.
  2. Prepare Your Financial Information: Gather your financial information, including your income, expenses, and assets, to complete the necessary financial disclosures required for your installment agreement.
  3. Determine Payment Plan: Decide on the payment plan you wish to pursue and determine the amount you can afford to pay each month. You can use the IRS Online Payment Agreement tool to help determine the best payment plan for you.
  4. Submit Your Application: Submit your installment agreement application to the IRS using the Online Payment Agreement tool, by mail, or by phone. Be sure to include all the necessary financial information and supporting documents.
  5. Wait for Approval: Wait for the IRS to approve your application. If they require additional information, they will contact you for more details.
  6. Make Payments: Once approved, start making payments on time and in full each month. You can use direct debit or make manual payments, depending on the terms of your agreement.
  7. Stay Compliant: Make sure to stay compliant with all your tax filing and payment requirements while on the installment agreement. If you fail to comply with the terms of your agreement, the IRS may terminate the agreement and pursue collection action against you.
  8. Finish Your Payment Plan: Once you complete your installment agreement payments, the IRS will release any liens they may have placed on your assets. Make sure to obtain written confirmation from the IRS that your agreement has been fully satisfied.

How Long Will I Have To Continue Making Monthly Payments?

In general, installment agreements (payments plans) last until either (1) your tax liability is paid in full, or (2) the period of time IRS is legally allowed to collect a debt (statute of limitations) expires.

A skilled tax attorney will help you determine whether you are a good candidate for a partial-pay installment agreement, which will expire when the collections statute of limitation expires. Any tax liability remaining after the expiration date will be written off by IRS.

Calculating Your Monthly Payment Amount

Calculating the monthly payment that is appropriate for you will depend on an in-depth analysis of your financial condition. The lower your ability to pay, the lower the monthly installment amount will be– even if you owe a significant amount of back taxes to the IRS!

However, your situation will have to meet a series of criteria:

  1. Owed tax debt: You must have an outstanding tax debt to the IRS.
  2. Timely filing: You must have filed all tax returns required by law, including current year tax returns.
  3. Payment capability: You must demonstrate that you are unable to pay the full amount of your tax debt upfront but can afford to make regular monthly payments.
  4. Payment amount: The payment amount must be equal to or greater than the minimum payment required by the IRS, which varies depending on the amount of your tax debt and the term of the installment agreement (unless you qualify for a partial pay installment agreement).
  5. Payment term: The payment term of the installment agreement will depend on the amount of your tax debt and the payment amount, but generally ranges from 6 to 72 months.
  6. Compliance: You must agree to comply with all tax laws and timely file all future tax returns while the installment agreement is in effect.

Types Of IRS Installment Agreements

  1. Guaranteed Installment Agreement: If you owe $10,000 or less to the IRS, have filed all your returns, and haven’t had any trouble with the IRS in the past 5 years, you can request an installment agreement and pay off the balance within 36 months. The IRS won’t file a tax lien so long as you comply with the agreement.
  2. Streamlined Installment Agreements for $25,000 or Less: If you owe $25,000 or less, can pay off the amount owed within 72 months, and are current with all your filing requirements, you can negotiate a payment plan with the IRS without disclosing your finances. You can avoid a tax lien with this type of agreement.
  3. Streamlined Installment Agreements for $25,001 to $50,000: If you owe between $25,001 to $50,000 in back taxes, you can request a payment plan that allows you to pay off the amount owed within 72 months, and the government can directly debit from your bank account. The IRS won’t file a tax lien so long as you stay compliant.
  4. In-Business Trust Fund Express Installment Agreements: If you own a small business with employees, you can apply for this type of payment plan if you owe $25,000 or less and can pay off the balance within 2 years. You don’t need to complete a financial statement or verification, but you must be compliant with all your filing and payment requirements.
  5. Partial Payment Installment Agreements: If you can’t pay off your back taxes within 10 years, but you can pay back some of the amount owed, you can try negotiating a partial pay installment agreement. This type of agreement requires a financial disclosure and verification, and the IRS may file a tax lien.
  6. Non-Streamlined Installment Agreements: If you don’t qualify or can’t afford any of the above payment plans, you must complete a financial disclosure and verification with a local IRS collector. The collector will assess your ability to pay and may require the liquidation of assets or the elimination of household expenditures. The IRS will file a tax lien to secure its interests against other creditors.

What Are The Benefits Of An Installment Agreement?

The main benefit of an installment agreement is the ability of a taxpayer to defer payment of their tax liability and thus give some breathing room to settle the tax debt. Another significant benefit is that the IRS will cease all collection activities, including releasing any levies or wage garnishments, so long as the taxpayer continues making installment payments under the terms of the agreement.

What Other Options Are Available For Me?

There are several tax debt settlement options that may be available for you. Even if an installment agreement is not the right vehicle to settle your tax debt, you may still qualify for an Offer in Compromise (OIC) or Currently Not Collectable (CNC) status. Contact Dallo Law Group to schedule a consultation to determine which tax settlement option is right for you!

How Can Dallo Law Group Help?

Dallo Law Group practices exclusively in the area of tax controversy and IRS collection matters and Installment Agreements (payments plans) are a significant part of our tax practice. We have the experience, knowledge, and technical know-how to produce the best settlement results for you. Unlike many of the nationwide tax resolution companies who advertise on the television and the radio, our local reputation and your satisfaction are of the highest importance to our firm.

Because determining the lowest minimum payment the IRS or other taxing agency may accept for the installment agreement depends highly on the specific facts and circumstances of the taxpayer, we take an individualized approach to every case and will conduct a thorough tax analysis to determine if an installment agreement is right for you. Contact Dallo Law Group to schedule a consultation!