1. #1

    Join Date
    Aug 2011
    Lahore, Pakistan
    Blog Entries

    Avoid being under the gun of the IRS – Installment options to repay your tax debt

    Tax debt can always be stressful to deal with and it is certainly different from owing debt to any other organization. With the rise in the debt obligations among the households, there are too many people who are not being able to manage their tax payments and are desperately looking for all those options through which they can avoid being tracked by the IRS and the appointed debt collection agencies. If you continue owing huge amount of debt to the IRS, the debt collection agencies and the IRS will keep on calling you in order to recuperate the amount. In case you’re not able to make payments to the IRS, here are some installments options that you can take resort to in order to eliminate debt fast and avoid a hit on your credit score.

    • Guaranteed installment agreements: If your balance is $10,000 or less than that, the IRS is supposed to agree to the installment plan but you require meeting certain qualification criteria. For the previous 5 years, you shouldn’t have filed late or paid your taxes late, all your tax returns should be filed, your monthly installments should pay off the entire balance in less than 36 months and you shouldn’t have had any installment agreement in the past 5 years. The minimum payment that the IRS will accept from you is the grand total balance divided by 30. The biggest benefit of a guaranteed installment agreement is that the IRS won’t file a federal tax lien as tax liens are reported to the credit bureaus and they will also negatively impact your credit.

    • Streamlined installment agreements: The IRS will approve this kind of installment plan when your balance is $25,000 or less than that and you also have to agree to pay off the balance within 60 months. If your balance expires within 5 year period due to the SOL (10 years) on collections, the IRS will immediately require full payment within the remaining SOL. The main benefit of a streamlined installment agreement is that a federal tax lien won’t be placed and you might have to fill out a simple form in order to initiate this process.

    • Partial payment installment agreement: If the minimum payments of the guaranteed and the streamlined installment agreements are not within your budget, you can better choose particle payment installment agreement. This is an installment plan where the monthly payment will be chosen by professional after considering the essential living expenses.

    Therefore, when you’re wondering about your rising tax debt, you might choose any of the above mentioned options in order to get out of debt.

    Nota Bene: This article is contributed by Andrew. The views expressed in the article are those of the author and not of the owner of the blog.

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