Tax Installment Agreements - Federal Lawyer

Tax Installment Agreements

We Help U.S. Taxpayers Negotiate Tax Installment Agreements with the IRS

Alina Veneziano
Attorney Alina Veneziano
Tax Installment Agreements Attorney & CPA Team Lead
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Nick Oberheiden
Attorney Nick Oberheiden
Tax Installment Agreements Attorney Team Lead
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U.S. taxpayers who owe more than they can afford to pay have several options available. One of these options is to negotiate a tax installment agreement with the IRS. When you negotiate a tax installment agreement, you can pay down your federal tax debt over time—and you can do so without fear of facing a tax lien, tax levy, or other IRS collection efforts.

When seeking to enter into a tax installment agreement with the IRS, there are several strategic considerations involved. For example, you will need to propose a payment plan that both (i) works for you and (ii) will be acceptable to the IRS. You will also want to consider the alternatives to proposing an installment agreement. If you have grounds to challenge the IRS’s determination of your tax liability, or if you are eligible to submit an offer in compromise, then seeking an installment payment agreement may not be your best option.

Requesting a Tax Installment Agreement

So, when should you consider a tax installment agreement? Negotiating an installment agreement with the Internal Revenue Service may be your best option if there is no dispute regarding your tax liability and you do not qualify to submit an offer in compromise. In this scenario, not only does negotiating an installment plan allow you to pay down your federal tax debt over time, but it also affords the following benefits:

  • Limiting Interest and Penalty Accrual – As a general rule, when you fall behind on your federal taxes, interest and penalties begin to accrue immediately—and they continue to accrue until you pay the full amount you owe. Entering into a tax installment agreement limits your interest and penalty accrual (as long as you make your monthly payment amount when they come due).
  • No Offset of Future Tax Refunds – One of the IRS’s options for collecting past-due taxes is to offset taxpayers’ future refunds. However, when you enter into a tax installment agreement with the IRS, your outstanding liability is not considered delinquent, so the IRS cannot retain your refunds in future years.
  • No Complications from IRS Tax Liens or Levies – Since your outstanding liability is not considered delinquent when you have a tax installment agreement, you also are not at risk of facing tax liens or levies. This means that you can avoid the consequences of having a lien or levy placed on your assets as well, such as losing access to financing opportunities.

Requesting a tax installment agreement involves filing Form 9465 with the IRS. As stated on the form, the IRS recommends that taxpayers, “[m]ake [their] payment as large as possible to limit interest and penalty charges, as these charges will continue to accrue until you pay in full.” Our attorneys can assist you with developing your payment plan and completing Form 9465, and then we can handle any follow-up communications with the IRS on your behalf.

Put our highly experienced team on your side

Dr. Nick Oberheiden
Dr. Nick Oberheiden

Founder

Attorney-at-Law

Lynette S. Byrd
Lynette S. Byrd

Former DOJ Trial Attorney

Partner

Brian J. Kuester
Brian J. Kuester

Former U.S. Attorney

Amanda Marshall
Amanda Marshall

Former U.S. Attorney

Local Counsel

Joe Brown
Joe Brown

Former U.S. Attorney

Local Counsel

John W. Sellers
John W. Sellers

Former Senior DOJ Trial Attorney

Linda Julin McNamara
Linda Julin McNamara

Federal Appeals Attorney

Aaron L. Wiley
Aaron L. Wiley

Former DOJ attorney

Local Counsel

Roger Bach
Roger Bach

Former Special Agent (DOJ)

Chris Quick
Chris J. Quick

Former Special Agent (FBI & IRS-CI)

Michael S. Koslow
Michael S. Koslow

Former Supervisory Special Agent (DOD-OIG)

Ray Yuen
Ray Yuen

Former Supervisory Special Agent (FBI)

Negotiating a Tax Installment Agreement with the IRS

Submitting Form 9465 does not guarantee that the IRS will accept your proposed payment plan. Once you file, the IRS will review your proposal and decide whether to accept, reject, or negotiate. As the IRS explains:

“When you request a payment plan (installment agreement), with certain exceptions, the IRS is generally prohibited from levying and the IRS’s time to collect is suspended or prolonged while an Installment Agreement (IA) is pending. An IA request is often pending until it can be reviewed, and an IA is established, or the request is withdrawn or rejected.”

If you need to enter into negotiations with the IRS regarding your proposed tax installment agreement, it will be important to have an experienced tax attorney on your side. When you cannot afford to pay the amount you owe in full, failing to secure a payment plan can have significant financial and legal consequences. An experienced tax attorney will be able to use his or her experience to negotiate effectively on your behalf, keep the lines of communication open, and work to secure a resolution that allows you to avoid going into default. At Oberheiden P.C., we have extensive experience representing U.S. taxpayers in high-risk scenarios, and our team can assist you throughout the tax installment agreement negotiation process.

Appealing the IRS’s Rejection of a Tax Installment Agreement

Along with representing U.S. taxpayers during tax installment agreement negotiations, we also represent taxpayers who need to appeal the IRS’s rejection of their proposed payment plans. If the IRS has rejected your proposed payment plan, you need to act quickly, as you only have 30 days from the date of the rejection before the IRS can begin pursuing collection. We have extensive experience representing clients in federal tax appeals as well. If you need to know more about the appeals process, we encourage you to schedule a complimentary consultation promptly so that we can file a timely appeal on your behalf if warranted.

Tax Installment Agreement vs. Offer in Compromise

If you are considering a tax installment agreement, you will likely also want to consider an offer in compromise. Negotiating an offer in compromise with the IRS allows you to pay less than the full amount you owe; and, when negotiating an offer in compromise, you can negotiate a payment plan as well.

Reducing the amount you owe also further limits the accrual of interest and penalties. To secure the IRS’s approval of an offer in compromise, however, you must also be able to demonstrate that fully satisfying your tax debt is unfeasible or would result in financial hardship. When you speak with a tax attorney at Oberheiden P.C., your attorney will help you evaluate all of your options so that you can make informed decisions about how to deal with the IRS.

Tax Installment Agreement vs. “Currently Not Collectible” Status

Another alternative to seeking a tax installment agreement is to seek “currently not collectible” status. However, interest and penalties continue to accrue while your tax debt is deemed non-collectible; and, while securing “currently not collectible” status prevents certain means of collection, the IRS can still file a Notice of Federal Tax lien against your property. With that said, seeking “currently not collectible” status does make sense in some cases; and, once again, it is worth considering all of the options you have available.

FAQs: Entering Into a Tax Installment Agreement with the IRS

What Are the Requirements for Obtaining a Tax Installment Agreement from the IRS?

To request a tax installment agreement, you must file Form 9465 with the IRS. If you are unable to complete the form for any reason, you won’t be able to file. Additionally, if you misrepresent any information on Form 9465, this can lead to a rejection of your request (and potentially lead to further scrutiny from the IRS). You may need to negotiate the terms of your tax installment agreement with the IRS as well. With all of this in mind, it is best to have an experienced tax attorney on your side.

If I Enter Into a Tax Installment Agreement with the IRS, How Many Months Will I Have to Pay?

Taxpayers requesting a tax installment agreement have the opportunity to state the number of months that they want to pay on Form 9465. If you do not request a specific agreement term with a minimum monthly payment, the IRS will assume a term of 72 months.

Are There Costs Associated with Entering Into a Tax Installment Agreement?

Yes, there are costs associated with entering into a tax installment agreement with the IRS. However, these costs will typically be more than offset by the reduction in interest and penalties owed. If you apply for a direct debit payment plan, the money will be drafted directly from your checking or savings account. When you speak with a tax attorney at Oberheiden P.C., your attorney will help you weigh the costs and benefits of requesting a tax installment agreement so that you can make a sound financial decision.

What if the IRS Rejects My Request for a Tax Installment Agreement?

If the IRS rejects your request for a tax installment agreement, one of your first priorities should be to find out why. In some cases, it will still be possible to negotiate with the IRS following a rejection. However, if the IRS is unwilling to consider your request further, then your next step may be to file an appeal.

Should I Hire an Attorney to Help Me Request a Tax Installment Agreement?

If you are thinking about requesting a tax installment agreement from the IRS, we strongly recommend speaking with an attorney before you do so. Not only will an experienced attorney be able to help maximize your chances of securing an agreement, but an experienced attorney will also be able to help you consider any alternatives that may be more favorable.


Schedule a Confidential and Complimentary Consultation with a Tax Attorney at Oberheiden P.C.

If you have questions about requesting a tax installment agreement (or appealing the IRS’s denial of your request for a tax installment agreement), we invite you to get in touch. To schedule a confidential and complimentary consultation with a tax attorney at Oberheiden P.C., please call 888-680-1745 or inquire online today.

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