Tax Debts: When Will the IRS Accept Installment Payments?

When you’re trying to resolve Internal Revenue Service (IRS) tax debts, it’s important to know all of your options. One of the most common tax debt resolutions is an IRS installment payment agreement. Our tax law expert explains when an IRS installment payment agreement is accepted and how a tax law attorney can make a difference.

IRS payment plans: Does the IRS always accept an installment agreement?

Justin Hein, Managing Attorney for Roni Deutch, A Professional Tax Corporation – a law firm that has been resolving IRS tax debts for American taxpayers for nearly 20 years – says that while IRS Installment payment agreements are generally accepted by the IRS, there are circumstances under which the IRS will not accept this resolution program. For example, an IRS installment payment agreement may not be accepted when a taxpayer has a large amount of “liquefiable” assets – assets that can quickly be turned into cash. However, under normal circumstances, IRS installment payment agreements are generally accepted.

How to make IRS installment payment agreements work for you

Tax lawyers who understand the tax system know how to negotiate with the IRS in order to make IRS installment payment agreements work for you – even when it might seem like the IRS might reject the resolution. Hein confides, “Many of our clients have liquefiable assets, but in certain situations we are able to prove to the IRS that our client needs the assets or the funds. In this situation, we may be able to secure an IRS payment plan for the client.”

Even in circumstances where the IRS may raise a flag or decline a monthly payment plan, there is a way out. The Streamline Installment Agreement does not require the same type of financial analysis that the regular IRS installment payment agreement requires. If you owe $25,000 or less in back taxes and are willing to pay that amount over the course of five years, the IRS is willing to enter into that agreement without any additional analysis.

Case Studies: IRS Installment Payment Agreements

Case Study 1: Large Liquefiable Assets

Mr. Smith, a taxpayer with substantial liquefiable assets, sought an IRS installment payment agreement. The IRS raised concerns about his ability to liquidate assets to cover his tax liabilities. With skilled negotiation by his tax attorney, it was demonstrated that liquidation would have adverse effects on the economy and local community. The IRS accepted the installment payment agreement, allowing Mr. Smith to settle his tax debts without selling essential assets.

Case Study 2: Negotiating With the IRS

Mrs. Johnson, a single mother facing financial difficulties, sought an IRS installment payment agreement. Her tax attorney negotiated with the IRS, highlighting her financial hardships and commitment to making regular payments. The attorney’s persuasive arguments led the IRS to accept the installment payment agreement, providing relief to Mrs. Johnson.

Case Study 3: Streamline Installment Agreement

Mr. Wilson, a young professional with a $25,000 tax debt, applied for the Streamline Installment Agreement. His tax attorney prepared a comprehensive application, demonstrating his steady income and the ability to repay the debt within the required timeframe. The IRS quickly accepted the application, allowing Mr. Wilson to clear his tax debts through manageable installments.