Payment plans
The IRS encourages you to pay what you owe as quickly as
possible. For those individuals or businesses not able to resolve a
tax debt immediately, an installment agreement can be an option.
Installment agreements allow for the full payment of the tax debt in
smaller, more manageable amounts over time. Documentation will be
required to prove financial hardship.
To be eligible for an installment agreement, you must be current with the IRS. The amount of an installment payment will be based on the amount owed and on the taxpayer's ability to pay that amount within the time legally available for the IRS to collect.
Taxpayers who already have an installment agreement may still find help. The amount previously agreed to may be lowered if circumstances show your ability to pay has decreased. A Collection Information Statement will have to be completed to illustrate your financial situation.
Things to keep in mind:
* The goal for Redding & Associates is to demonstrate to the IRS or the State that you cannot pay the full amount.
* The advantage of an Installment Agreement is that no enforced collection takes place while the taxpayer is on the plan providing the taxpayer doesn’t default.
* The disadvantage of an Installment Agreement is that interest and perhaps penalties continue to accrue every year.