An IRS installment agreement allows taxpayers to pay their tax debt gradually over time through monthly payments, rather than paying the entire amount upfront. This option is available for those who cannot afford to pay their full tax liability at once. The IRS recognizes that collecting smaller payments over time is better than pushing taxpayers into financial hardship, and since interest is applied to unpaid balances, it benefits the agency as well.

 

For taxpayers, installment agreements can make managing large tax bills more practical, similar to how monthly car payments are often more manageable than paying for a car in full.

 

What Is the Minimum Monthly Payment?

 

For tax balances between $10,000 and $25,000, the minimum monthly payment is typically calculated by dividing the total balance by 72. If you find the proposed payment amount unaffordable, you can negotiate or appeal to the IRS for a lower monthly payment. 

 

Enlisting the help of an Erolled Agent or qualified tax professional can make this process easier. Professionals familiar with IRS rules can help secure the best possible terms and explore other tax relief options that may be more beneficial than an installment agreement.

 

Benefits of an IRS Installment Plan

 

1. Avoiding Penalties and Collection Actions: By setting up a payment plan, you can prevent the IRS from taking further collection actions like wage garnishment, bank levies, or property liens.  

2. Financial Flexibility: Spreading out payments over time makes it easier to manage your finances while still addressing your tax debt.

 

How Long Does It Take to Set Up an Installment Plan?

 

It typically takes four to six weeks to finalize an IRS installment agreement and set up your payment method. If you choose direct deposit or payroll deduction, the process may move faster. Delays can occur if other payment methods are used.

 

How Long Can IRS Installment Plans Last?

 

IRS installment plans generally allow you to pay off your tax debt over a period of up to six years.

 

How Can National Tax Problem Solutions Help?

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National Tax Problem Solutions professionals have helped thousands of clients resolve tax issues through installment agreements and other IRS tax relief programs. They can work on your behalf to secure the best possible terms for your payment plan or find other solutions that may be more advantageous. If you’d like to explore your options, National Tax Problem Solutions offers free consultations to get you started.