Installment plans for tax debt place relief within your reach
There may be few things more stressful than dealing with the Internal Revenue Service. Like many, you may feel that your tax burden increases each year, and now you are facing back taxes that have thrown your teetering budget over the edge.
The IRS wants its money. Unfortunately, the IRS has power to collect overdue taxes that other creditors may not have. If you have concerns about the garnishment of your paycheck, liens on your property or the persistent phone calls of IRS debt collectors, you have every right to worry. While you may be tempted to go deeper in debt to pay off your taxes in one lump sum, there are other alternatives available that may be more advantageous for your circumstances.
Break it down
You probably pay most of your debts in installments; otherwise, you may not be able to manage them. Imagine, for example, having to come up with a lump sum to buy a house or a car. Did you know it is possible to request an installment agreement from the IRS? Under certain circumstances, the IRS will agree to allowing you to make monthly payments to pay off your tax debt.
If all your tax returns are filed and you are willing to agree to file future tax returns and make tax payments on time, you may qualify for one of several installment options, including:
- ·Guaranteed Installment Agreement: If you owe less than $10,000 and meet several other requirements, you may be eligible for a 36-month installment plan. Your minimum payment will be at least 1/30 of your total tax bill, interest and penalties. This plan protects you from tax liens that could result in a hit on your credit score.
- ·Streamlined Installment Agreement: If you owe $50,000 or less, the IRS may approve a plan for you to repay your tax debt within 72 months. This method of repayment also relieves you of the threat of a credit-damaging tax lien.
- ·Partial Payment Installment Agreement: If the formulas used in the previous agreements produce a monthly payment that you cannot afford, the IRS may consider you for this plan, which stretches out the length of the term and reduces the payments based on your ability to pay. Unfortunately, the IRS will probably file a lien against you if you use this installment agreement.
You may not qualify for any of these plans, for example, if you owe more than $50,000. However, you are not out of options. It bears repeating that the IRS wants its money and is willing to negotiate to get it back. However, those negotiations can be stressful and complex. Having the assistance of an experienced Las Vegas tax attorney can make all the difference in the outcome.