IRS-Internal Revenue Service
IRS is an Internal Revenue Service, a United States government department accountable for administering tax laws and accumulating taxes from individuals. The tax accumulation process involves collecting taxes from wage workers through payroll subtractions. Based on quarterly tax filings, this process consists of managing the quarterly tax payments from the corporations.
When you need to catch up on your income tax payments, the IRS has set up some plans for the tax payment that prove helpful for you to tackle the bill within time. So whenever you request the installment agreement or payment plan, you need to fill out the form and file it with the return of tax, online and over the phone.
It is essential to understand some facts about the IRS installment agreement.
IRS Installment Agreement: Some Important Facts
IRS installment agreement is an agreement you make with the organization to pay the Confederate tax bill within a certain period. It is essential to request an installment agreement if you are sure you will pay the taxes within a certain period.
There are generally two types of installment agreement options. The first option is a short-term installment agreement, and the other option is a long-term installment agreement.
A short-term installment agreement allows taxpayers to pay their tax bill in 90 or 180 days without a user fee. Secondly, the long-term installment agreement allows taxpayers to pay their tax bills in monthly installments for more than 180 days.
Incredible Benefits of the IRS Installment Agreement
Some great benefits of IRS installment agreements prove helpful for you in paying your taxes.
- IRS Installment Agreement allows you to pay your taxes on time while avoiding embellishments.
- IRS Installment Agreement makes payments more affordable, but you still have to pay the penalties for late tax payments.
- IRS Installment Agreement allows you to choose your payment amount for a month.
- The IRS Installment Agreement gives you approximately 72 or 84 months, depending on the amount chargeable.
- IRS Installment Agreement provides you with the option of a customized installment agreement.
Cost Of IRS Installment Agreement
This depends upon what installment agreement you choose and how you apply for the installment agreement. For example, if you can pay your tax bill within 180 days, you do not need to pay any fee to set up an installment agreement. Suppose you are a lower-income taxpayer, so the Internal Revenue Service gives up the user’s fee.
Moreover, there are two other payment options. Using a credit card for payment will cost $2 to $4; using a debit card for payment will cost 2% of the total fee.
Eligibility Criteria For An IRS Installment Agreement
Generally, it is determined by the tax situation that Installment Agreements are available for you.
Payment options include complete installment agreements and short and long-term installment agreements. With the help of the IRS Online Payment Agreement tool, you can apply for long-term and short-term installment agreements.
Short-term IRS Installment Agreement
In this agreement, you generally owe $100,000 in combined charges, penalties, and appeals and have filed all your federal tax returns. Moreover, you can finish your tax returns in 90 or 180 days.
Long-term IRS Installment Agreement
In this agreement, you generally owe $50000 or less in combined charges, penalties, and appeals and have filed all your federal tax returns. Moreover, you can finish your tax returns in over 90 or 180 days.
How To Apply For An IRS Installment Agreement Online: Steps To Follow
If you want to apply for an IRS Installment Agreement, you can benefit yourself with the IRS Online Payment Agreement tool, which helps you to apply online for the agreement according to your needs. You should follow the steps to apply for an IRS Installment Agreement.
If you are registered already on that site, you need to log into your account, but if you are not registered, you need to create an ID.me account, which must contain the following details.
- Provide a valid email address
- Provide access to your email address
- Provide identification of your Photo
- Provide the driving license and passport
- Provide the number of your social security
- To verify your identity, provide access to a webcam
- Provide access to the phone number for further clarification.
What Changes Can Be Made With IRS Installment Agreement Online?
If you want to change the IRS Installment Agreement Online, you can use the IRS Online Payment Agreement tool to make the changes. The Following are the changes that can be made with the installment agreement online.
- You can change the amount of your monthly payment
- You can change the final date of your monthly payment
- You can change your agreement to a Debit card agreement
- You can change the number on Debit card agreement
- You can restore after installation
Three Major Reasons That Can Cause A Refusal Of Your Installment Agreement Proposal By IRS
- Internal Revenue Service may consider your expenses extravagant
- Incomplete information
- You reverted to a prior installment agreement
Internal Revenue Service may Consider Your Expenses Extravagant
The IRS may consider your expenses wasteful, meaning it does not consider your living expenses. It only makes sense to the IRS if you have to send your children to schools or if you have to pay for charity. This is the reason that your installment agreement proposal can be refused.
Incomplete Information
If you do not provide complete information about yourself on the 433-A form, the IRS feels that you are hiding some important information. This is another reason that your installment agreement proposal can be refused.
You Reverted to a Prior Installment Agreement.
The IRS does not directly reject your proposal but leaves it with some doubt, so it is necessary to keep negotiating.
Drawbacks of the IRS Installment Agreement
- You have to pay some of the penalties continuously while you are paying your tax bill
- You have to pay an enrollment fee of up to $225 before initiating any installment agreement
- It does not provide safety from federal tax charges