If you are searching for Jacksonville IRS installment agreement help, there is a good chance you are dealing with an IRS balance due, collection notices, wage garnishments, bank levies, or increasing pressure from the IRS collection division.

Many taxpayers view an IRS installment agreement as nothing more than a payment plan. While that description is technically correct, it often misses the bigger picture.

An effective IRS Installment Agreement Strategy is not simply about obtaining approval from the IRS. It is about determining whether an installment agreement is the right solution, structuring the agreement in a sustainable manner, protecting your financial position, and integrating the agreement into an overall tax resolution strategy.

In many cases, the installment agreement itself is not the final objective. Instead, it may serve as a tool to stop aggressive IRS collection activity, preserve assets, maintain financial stability, or create time to pursue a more favorable long-term resolution.

Every taxpayer’s situation is different. A payment arrangement that makes sense for one taxpayer may be completely inappropriate for another. That is why I begin every case with an investigation rather than a predetermined solution. Providing correct resolution support to Jacksonville area taxpayers is the core mission of Harmon Tax Resolution.

Why My Background as a Tax Attorney, CPA, and Enrolled Agent Matters

IRS installment agreements sit at the intersection of tax law, financial analysis, and IRS procedure.

Many professionals approach IRS problems from only one perspective. Some focus primarily on legal issues. Others focus on accounting and financial analysis. Still others focus on navigating IRS procedures. Developing an effective IRS Installment Agreement Strategy often requires legal analysis, financial analysis, and a practical understanding of IRS procedures.

My background as a Tax Attorney, Certified Public Accountant (CPA), and IRS Enrolled Agent allows me to evaluate all three.

As a Tax Attorney, I analyze collection statutes, appeal rights, liens, levies, procedural issues, and the legal authority governing IRS collection actions. I am often looking beyond the immediate collection problem to understand how today’s decisions may affect the taxpayer years from now.

As a CPA, I analyze financial information. Installment agreements frequently rise or fall based upon income, expenses, asset equity, cash flow, future earning capacity, and the tax consequences associated with various financial decisions.

As an Enrolled Agent, I bring practical experience working within the IRS administrative system. This includes transcript analysis, Revenue Officer procedures, collection operations, and an understanding of how IRS personnel evaluate financial information.

Together, these perspectives allow me to evaluate the legal issues, financial issues, and procedural issues before recommending a resolution strategy. The goal is not simply obtaining an installment agreement. The goal is identifying the strategy that produces the best overall outcome for the taxpayer.

It is important to make sure to partner with a trustworthy, capable and reputable tax resolution firm who will ensure the best strategy is put forward.

What Most Taxpayers Get Wrong About IRS Installment Agreements

One of the most common misconceptions I encounter is the belief that every taxpayer who cannot immediately pay their tax debt should simply request a payment plan.

While installment agreements are often an excellent tool, that assumption can lead taxpayers down the wrong path.

I routinely encounter taxpayers who enter the wrong type of installment agreement, agree to unnecessarily high monthly payments, trigger avoidable financial disclosure requirements, overlook collection statute issues, and fail to consider other available resolution options.

The issue is not whether the IRS will approve an installment agreement.

The issue is whether the installment agreement makes sense when viewed in the context of the taxpayer’s entire financial and legal situation.

How an IRS Installment Agreement Strategy Begins With Investigation

Before recommending any installment agreement, I conduct a thorough investigation. Every IRS Installment Agreement Strategy should begin with a thorough investigation of the taxpayer’s facts and circumstances.

When evaluating an IRS collection case, I want to understand what the IRS believes is owed, how the liability arose, how long the IRS has to collect the debt, whether liens or levies exist, whether prior agreements have been established, whether compliance concerns exist, and whether other resolution options may produce a better overall result.

This process often begins with a review of IRS transcripts.

Transcripts can reveal information that taxpayers frequently do not realize exists, including prior collection actions, assessment dates, collection statute information, lien filings, installment agreement history, and pending collection activity.

I also review the taxpayer’s compliance history. A taxpayer who has previously defaulted an installment agreement may face different challenges than a taxpayer requesting a payment arrangement for the first time.

Most importantly, I am looking for opportunities.

I evaluate whether all allowable expenses have been properly considered, whether collection statutes have been correctly calculated, whether appeal rights remain available, and whether another resolution option may produce a more favorable result.

The investigation is not about forcing a particular solution. It is about identifying the best available solution.

IRS Financial Analysis: More Than Income and Expenses

The IRS generally evaluates a taxpayer’s ability to pay using standards found throughout IRM 5.14 (Installment Agreements) and IRM 5.15 (Financial Analysis Handbook).

The Internal Revenue Manual (IRM) is the primary operating manual used by IRS employees. While it is not the Internal Revenue Code, it provides important guidance regarding how IRS personnel evaluate collection cases.

The IRS frequently relies on National Standards and Local Standards when evaluating allowable living expenses. These standards establish guideline amounts for categories such as food, housing, transportation, and other necessary expenses.

However, these standards do not always tell the entire story.

In certain situations, taxpayers may have legitimate expenses that exceed standard allowances. The IRS may allow certain expenses above the National and Local Standards when the taxpayer can demonstrate that the expenses are necessary and reasonable under the circumstances. Examples may include:

• Extraordinary medical expenses
• Disability-related expenses
• Court-ordered obligations
• Special educational needs
• Other necessary expenses supported by documentation

Part of my analysis involves determining whether deviations from standard allowances are appropriate and whether sufficient documentation exists to support those deviations.

The difference between a sustainable installment agreement and an unsustainable installment agreement is often not income. It is whether the financial analysis was performed correctly.

Evaluating Assets, Equity, and Borrowing Potential

Another important part of the analysis involves taxpayer assets and available equity.

Many taxpayers assume that simply because they own a home, retirement account, business interest, or investment asset, the IRS will automatically require liquidation before considering an installment agreement.

Conversely, some taxpayers assume that the IRS will ignore those assets entirely.

Neither assumption is always correct.

As part of its financial analysis, the IRS may evaluate whether equity exists in certain assets and whether that equity is reasonably available to satisfy the liability. The IRS may also consider whether borrowing against assets is possible.

However, the existence of equity does not automatically mean liquidation is the appropriate solution.

Factors such as age, health, retirement status, marketability, borrowing ability, cash flow, tax consequences, and overall economic reality may all affect the analysis.

The IRS may also evaluate whether a taxpayer has the ability to borrow against assets rather than liquidate them outright.

For example, the IRS may consider whether equity exists in a personal residence, retirement account, investment account, business asset, or other property that could potentially be used to satisfy the tax liability.

However, the existence of equity does not automatically mean borrowing is realistic, available, or appropriate.

In evaluating borrowing potential, I frequently examine factors such as:

• The taxpayer’s age and retirement status
• Existing debt obligations
• Creditworthiness
• Debt-to-income ratios
• Health concerns
• Lending restrictions
• Tax consequences associated with liquidation or borrowing
• Overall economic reality

In some cases, borrowing against an asset may be a reasonable solution. In other cases, forcing a taxpayer to borrow or liquidate assets may create more financial harm than benefit. A proper analysis requires far more than simply identifying available equity.

This is another reason why a complete investigation should occur before selecting a resolution strategy.

Real-World Example: Why Investigation Matters

One recent matter illustrates why a thorough investigation is critical before recommending an installment agreement.

The taxpayer owed approximately $180,000 to the IRS and earned a substantial annual income. At first glance, many practitioners would have assumed the taxpayer should liquidate assets or borrow against available resources to pay the liability.

However, a deeper investigation revealed a more complicated picture.

The taxpayer’s financial condition included retirement assets, ongoing financial obligations, future retirement concerns, and collection statute considerations that significantly impacted the analysis. Simply looking at the balance due and asset values did not tell the entire story.

After reviewing IRS transcripts, analyzing the Collection Statute Expiration Dates, evaluating the taxpayer’s cash flow, and examining the practical realities of the taxpayer’s financial situation, a structured installment agreement strategy was developed that protected the taxpayer’s long-term financial interests while resolving the IRS collection problem.

The lesson is simple. Effective IRS representation is rarely about finding the quickest solution. It is about finding the solution that produces the best overall outcome after considering all relevant facts and circumstances.

Types of IRS Installment Agreements

Streamlined Installment Agreements

Streamlined Installment Agreements are generally available for qualifying taxpayers with balances within IRS thresholds and typically do not require extensive financial disclosure.

These agreements are often the simplest option but are not always the best option.

Non-Streamlined Installment Agreements

When larger balances exist, the IRS may require detailed financial disclosures before approving a payment arrangement.

These cases often involve more extensive financial analysis and negotiation.

Partial Pay Installment Agreements

A Partial Pay Installment Agreement (PPIA) allows taxpayers to make monthly payments that may not fully satisfy the liability before the collection statute expires.

PPIAs are frequently overlooked but can be powerful tools when supported by the facts and circumstances of the case.

Understanding the Collection Statute Expiration Date (CSED)

The Collection Statute Expiration Date is often one of the most important factors when developing an IRS Installment Agreement Strategy.

Under IRC §6502, the IRS generally has ten years from assessment to collect a tax liability.

However, determining the actual expiration date is not always straightforward.

Certain events may suspend or extend the collection period, including:

• Bankruptcy proceedings
• Collection Due Process hearings
• Pending Offers in Compromise
• Certain military service periods
• Other statutory tolling events

This is one reason I never assume a collection statute calculation is correct without verification.

I have encountered situations where transcript analysis revealed issues that materially changed the strategy and outcome of a case.

When substantial time remains on the collection statute, one strategy may be appropriate. When only a limited amount of time remains, an entirely different strategy may produce a better result.

Collection Statute Expiration Date analysis can significantly impact installment agreement strategy and other IRS resolution options.

How an IRS Installment Agreement Strategy Can Stop IRS Collections

Internal Revenue Code §6159 authorizes the IRS to enter into installment agreements when doing so facilitates collection of a tax liability.

One of the most important benefits of a properly structured installment agreement is the protection it may provide against aggressive collection activity.

Depending on the status of the case, installment agreements may help prevent:

• Bank levies
• Wage garnishments
• Continued collection enforcement
• Additional collection pressure

Timing matters. The stage of the collection case matters. Whether a Revenue Officer has been assigned matters.

However, a properly structured installment agreement can often provide the breathing room necessary to stabilize a taxpayer’s financial situation and pursue a longer-term strategy.

Revenue Officer Cases Often Require a Different Strategy

Not all IRS collection cases are handled the same way.

Some cases remain within the IRS Automated Collection System (ACS), while others are assigned to a local Revenue Officer.

When a Revenue Officer becomes involved, the stakes often increase significantly.

Revenue Officers typically conduct more detailed investigations, request additional financial information, evaluate asset equity more aggressively, and have greater flexibility in pursuing enforced collection actions.

A Revenue Officer may request:

• Financial statements
• Bank records
• Proof of expenses
• Asset documentation
• Borrowing information
• Business records

The timing of collection actions may also accelerate.

Because Revenue Officers have greater discretion and direct involvement in the case, installment agreement strategy often becomes even more important. Financial disclosures must be carefully reviewed, collection statutes must be evaluated, and all available resolution options should be considered before submitting information to the IRS.

The approach that works in an Automated Collection System case may not be sufficient in a Revenue Officer case.

Understanding the difference can have a substantial impact on the outcome.

Compliance: The Foundation of Every Successful Installment Agreement

Obtaining approval is often the easy part.

Maintaining the agreement is where many taxpayers encounter problems.

The IRS generally requires taxpayers to remain compliant throughout the duration of the agreement.

This means:

• Filing future tax returns on time
• Paying future taxes as they become due
• Maintaining adequate withholding
• Making required estimated tax payments

One of the most common reasons installment agreements fail is pyramiding tax debt.

Pyramiding occurs when a taxpayer enters an agreement to resolve old tax liabilities while simultaneously creating new tax liabilities.

Before recommending an installment agreement, I evaluate whether the taxpayer can realistically remain compliant moving forward.

A payment arrangement that resolves prior tax debt but creates future tax problems is rarely a successful outcome.

Sometimes an Installment Agreement Is the Wrong Answer

Not every taxpayer should enter into an installment agreement.

Sometimes another resolution option may produce a better result.

Depending upon the circumstances, alternatives may include:

• Offer in Compromise
• Currently Not Collectible Status
• Innocent Spouse Relief
• Appeals
• Audit Reconsideration

The key is understanding the taxpayer’s complete financial and procedural situation before selecting a strategy.

An Installment Agreement Can Be a Bridge to a Better Resolution

Many taxpayers assume an installment agreement is the final resolution of their IRS problem.

In some cases, that is true.

In other cases, the installment agreement serves as a bridge to a more favorable long-term resolution.

For example, a taxpayer may need time for:

• Retirement
• Income changes
• Business restructuring
• Medical developments
• Expiration of collection statutes
• Additional documentation development

A properly structured installment agreement can provide stability and protection while those opportunities develop.

Frequently Asked Questions About IRS Installment Agreements

How Long Can an IRS Installment Agreement Last?

The answer depends on the type of installment agreement, the amount owed, and the taxpayer’s financial circumstances.

Many taxpayers are familiar with Streamlined Installment Agreements, which often allow qualifying taxpayers to spread payments over as many as 72 months. However, that is not the only type of agreement available.

In some situations, the IRS may require a shorter repayment period based upon the taxpayer’s ability to pay. In other situations, a Partial Pay Installment Agreement may be appropriate when the taxpayer is unlikely to fully satisfy the liability before the Collection Statute Expiration Date (CSED).

The length of an installment agreement should not be determined solely by what produces the lowest payment. The agreement should be evaluated in light of the taxpayer’s financial condition, collection exposure, compliance requirements, and long-term resolution strategy.

Can the IRS Reject an Installment Agreement?

Yes.

Many taxpayers assume that if they offer a monthly payment, the IRS must accept it. That is not always the case.

The IRS evaluates installment agreement requests based upon the taxpayer’s compliance history, financial condition, ability to pay, and the specific type of agreement being requested.

For example, a taxpayer who has unfiled tax returns will generally need to become compliant before an agreement can be approved. Likewise, taxpayers who have defaulted previous agreements may face additional scrutiny.

The IRS may also reject a proposal if it determines the taxpayer has the ability to make larger payments or if required financial information is incomplete.

This is one reason I conduct a detailed investigation before submitting a proposal. Understanding how the IRS is likely to evaluate the case often allows problems to be addressed before they become obstacles.

Does an IRS Installment Agreement Stop Wage Garnishment?

In many situations, yes.

One of the primary benefits of a properly structured installment agreement is the protection it may provide from aggressive collection activity.

Depending upon the stage of the collection process, an approved installment agreement may prevent wage garnishments, bank levies, and other enforced collection actions.

In many cases, collection protections begin once a qualifying installment agreement request becomes pending. However, the exact impact depends upon the facts of the case, the status of the collection action, and whether a Revenue Officer has been assigned.

Because timing can be critical, taxpayers facing wage garnishment or levy action should generally seek assistance before collection activity progresses further.

What Is a Partial Pay Installment Agreement?

A Partial Pay Installment Agreement, commonly referred to as a PPIA, is a type of installment agreement in which the taxpayer makes monthly payments even though the liability may not be fully paid before the collection statute expires.

Unlike traditional installment agreements, the objective is not necessarily to pay the entire balance. Instead, the IRS evaluates the taxpayer’s ability to pay and may accept payments based upon current financial circumstances.

PPIAs can be particularly valuable when a taxpayer has limited disposable income and relatively little time remaining on the Collection Statute Expiration Date.

However, they are not appropriate in every situation. Careful financial analysis and statute review are critical before pursuing this strategy.

Can the IRS File a Tax Lien While I Am on a Payment Plan?

Possibly.

Many taxpayers incorrectly believe that entering into an installment agreement automatically prevents the IRS from filing a Notice of Federal Tax Lien.

The reality is more complicated.

Whether the IRS files a lien may depend on factors such as the amount owed, the type of installment agreement, the taxpayer’s collection history, and current IRS policies.

In some situations, strategic planning before entering into an agreement may reduce lien exposure. In other situations, a lien may be unavoidable regardless of the payment arrangement selected.

Because liens can affect financing opportunities, credit relationships, and asset transactions, this issue should be evaluated as part of the overall resolution strategy.

What Happens If I Miss a Payment?

Missing a payment does not always result in immediate termination of the agreement, but it can create significant problems.

Installment agreements generally require taxpayers to make all payments on time and remain compliant with future tax obligations.

If a taxpayer falls behind, the IRS may issue default notices and provide an opportunity to correct the problem. However, continued noncompliance may result in termination of the agreement and renewed collection activity.

In addition to missed payments, installment agreements frequently default because taxpayers fail to file future tax returns or incur additional tax liabilities.

For that reason, maintaining compliance is just as important as obtaining the agreement in the first place. If you miss a payment, make sure to make the next payment on time.

How Does the IRS Determine Monthly Installment Agreement Payments?

The IRS generally begins by evaluating the taxpayer’s financial condition.

This analysis often includes income, living expenses, assets, liabilities, and future earning potential.

IRS personnel frequently rely on financial guidelines found in the Internal Revenue Manual, including National Standards and Local Standards for certain categories of living expenses.

However, many taxpayers are surprised to learn that those standards do not always represent the final answer.

In appropriate circumstances, taxpayers may be able to justify expenses that exceed standard allowances. Medical conditions, disability-related costs, court-ordered obligations, and other documented circumstances may affect the analysis.

This is one reason detailed financial investigation can have a substantial impact on the outcome of a case.

Should I Choose an Installment Agreement or an Offer in Compromise?

There is no universal answer.

An Offer in Compromise and an Installment Agreement are different tools designed for different situations.

Some taxpayers are strong Offer in Compromise candidates because their assets and future income indicate that the IRS is unlikely to collect the full liability.

Others may not qualify for an Offer in Compromise but may still obtain an affordable installment agreement that achieves a favorable outcome.

There are also situations where a taxpayer may begin with an installment agreement and later pursue a different resolution strategy as circumstances change.

The correct choice depends upon the taxpayer’s income, assets, collection statute considerations, compliance history, and overall financial condition.

That is why I evaluate all available options before recommending a particular course of action.

Why Should I Hire a Tax Attorney, CPA, and Enrolled Agent for an IRS Installment Agreement?

Many installment agreement cases involve more than simply completing IRS forms.

A successful resolution often requires legal analysis, financial analysis, transcript review, collection statute evaluation, and a practical understanding of IRS procedures.

As a Tax Attorney, CPA, and Enrolled Agent, I evaluate each case from multiple perspectives. This allows me to analyze legal issues, financial issues, and procedural issues before recommending a strategy.

Rather than focusing solely on obtaining approval, my objective is to identify the resolution option that produces the best overall outcome based upon the taxpayer’s specific facts and circumstances.

Final Thoughts

A properly developed IRS Installment Agreement Strategy can be one of the most effective tools available to taxpayers facing IRS collections.

However, an installment agreement should never be viewed as merely a payment plan.

The IRS is not simply evaluating whether a taxpayer can make a monthly payment. The IRS is evaluating the taxpayer’s overall financial condition, ability to pay, asset equity, compliance history, and future collection potential.

A successful strategy requires more than completing forms and requesting approval.

It requires investigation.

It requires transcript analysis.

It requires financial analysis.

It requires an understanding of IRS procedures, collection statutes, and available resolution alternatives.

Most importantly, it requires selecting the solution that best fits the taxpayer’s unique facts and circumstances.

In some cases, that solution will be a streamlined installment agreement. In other cases, it may be a Partial Pay Installment Agreement, an Offer in Compromise, Currently Not Collectible status, or another resolution path entirely.

The objective is not simply obtaining an installment agreement.

The objective is achieving the best overall outcome.

Every IRS installment agreement strategy should begin with transcript analysis, financial review, and evaluation of all available resolution options.

Take Back Control of Your IRS Situation

If you are dealing with IRS debt, the worst thing you can do is wait or approach the IRS without a clear strategy.

An installment agreement, when structured properly, can:

• Stop IRS collections
• Protect your assets
• Give you a clear path forward
• Help you regain peace of mind

At Harmon Tax Resolution, LLC, we take a strategic approach to every case—because no two IRS situations are the same.

You may qualify for a solution that reduces your financial burden and helps you move forward with confidence. Contact Harmon Tax Resolution.

📞 Harmon Tax Resolution, LLC
Jacksonville: 904-616-8256
Port Saint Lucie: 772-418-0949
Clearwater: 813-325-6009
🌐 www.harmontaxresolution.com

Of the various options for taxpayers dealing with IRS tax liability issues, the IRS Regular Installment Agreement (IA) and the IRS Partial Pay Installment Agreement (PPIA) are the most used. To get a better understanding, let’s go over each plan type and its respective benefits and qualifications.

What is an IRS Installment Agreement?

An IRS Installment Agreement (IA) is a monthly payment plan set up with the IRS to pay your outstanding tax balance. An IA is for use when you have sufficient income or assets to make payments to cover the total amount of the tax balance owed. There are several types of full payment plans, and depending upon your tax situation will determine which payment plan would work best for you. Full payment options include a short-term payment plan (paying in 180 days or less) or a long-term payment plan (installment agreement) (paying monthly) which in some cases could be as long as seven years (84 months). Most are generally setup up for six years (72 months). Let’s start with the long-term payment plan.

Long-term payment plans (Installment Agreement):

have specific tax balance stipulations. When you owe $50,000 or less in combined tax, penalties, and interest and have filed all required returns, you should be to get a full payment IA payment plan for six years (72 months) simply by requesting it. If you owe more than $50,000, the IRS will request that you complete either Form 433-A or B. With either of these forms, you will need to provide a complete financial listing of assets, liabilities, income, and expenses from which the IRS will ascertain what amount of monthly disposable income you have to use for payment.

Short-term payment plan:

You owe less than $100,000 in combined tax, penalties, and interest. A short-term payment plan pays the total balance due in 180 days or less. This plan helps avoid incurring significant interest costs.

What’s the longest time I can request an IRS Installment Plan?

Important to note that when it comes to IA, the IRS generally requires you to pay the entire tax liability within seven years (84 months) or within the Collection Statute Expiration Date (CSED), whichever occurs first. CSED is ten years from the date the IRS assesses your tax amount. Ordinarily, it is only during the CSED period that the IRS can enforce collections on an unpaid tax. When negotiating an IA with the IRS or any other resolution, knowing the CSED for any outstanding tax balance is critical.

How Do I Determine How Much I Should Offer to Pay the IRS on a Monthly Installment Plan?

Ensuring that the monthly payment amount is within your budget is the ideal way to make an IA offer to the IRS versus doing so by coming up with an amount strictly based on getting IRS approval. The latter way could backfire if the plan defaults, making it challenging to negotiate another plan with the IRS favorably. The way to avoid making a mispayment calculation is to complete the applicable 433 forms thoroughly. The form’s function is to obtain an accurate financial determination of your monthly disposable income. It may be beneficial to speak with a tax professional regarding how to maximize the efficiency of this form whenever the IRS needs it for a resolution determination, such as installment plan types, Offers In Compromise, or Currently Not Collectible Status.

How long does it take for IRS to approve an Installment Agreement?

Ordinarily, it can take up to two months to obtain an Installment Agreement approval. It could take longer if your tax bill is more than $100,000.

What do you need to apply for a Payment Plan?

To do it online, you need to create an IRS account with ID.me, and for verification purposes, you will need photo identification.

You will need your bank routing and account numbers if you apply for a direct debit payment plan.

If you recently filed your tax return or your return was examined but have not received a balance notice from the IRS, you will need the balance due shown on your return.

Are there fees to apply for an Installment Agreement?

Yes, you must pay setup fees: The setup fee for an installment agreement with IRS varies depending on your chosen plan. The IRS charges $225.00 for a non-direct debit installment agreement unless set up online through www.irs.gov. The cost is $149.00 for non-direct installment agreements and $107.00 for direct debit agreements applied through phone, mail, or in-person, and $31.00 if applied online. For non-direct debit installment agreements, a reduced $43.00 fee ($0.00 for direct debit agreements) applies if you have income at or below specific government poverty guidelines. If you qualify, you may apply by submitting Form 13844 (Application for Reduced User Fee for Installment Agreements).

What Should I do if the IRS denies my Installment Agreement?

Sometimes the IRS does reject requests for Installment Agreements– if this happens to you, you have the right to appeal. To appeal, you must complete and submit Form 9423, Collection Appeals Request, within thirty days of the rejection notice.

Will the IRS keep my refund if I have an Installment Agreement?

Unfortunately, the IRS will automatically apply any refund or overpayment against your tax balance. This is stipulated within the Installment Agreement. Even though any refunds or overpayments will reduce your balance, you must continue making the agreed-upon monthly payments until fully paid.

What is a Partial Payment Installment Agreement?

When your current level of financial resources enables some payment towards the tax liability but not enough to cover the entire balance by the time the CSED expires, you may qualify for an IRS Partial Payment Installment Agreement (PPIA). When applying for this type of resolution, the IRS requires the completion of forms 433 A or B. From your financial data, the IRS determines your disposable income based on allowable local and national standards for expenses and what is available as equity in your assets. There are some exceptions in which you may qualify based on individual circumstances; therefore, seeking advice from a tax resolution expert may be helpful.

A PPIA is primarily a temporary payment plan that lasts between two and three years before the IRS requires you to provide updated financial information to determine whether to provide for a continuance. The IRS terminates the first agreement and then decides whether to reinstate the PPIA again based on your updated financial position. This process may occur again until the CSED is reached.

Couple of things to bear in mind. First, while in either IA or PPIA, the interest and penalties continue to accrue while a tax balance exists. Second, the IRS has a right to protect its interest by filing a Federal Tax Lien toward the balance owed.

Generally, the IRS will not file a tax lien for amounts under $10,000 unless there is an imminent danger of their inability to collect due to other circumstances like bankruptcy, for example.

If your tax balance is $50,000 or greater, the IRS will automatically issue a Federal Tax Lien to you.

On the positive side, the CSED continues to run. Based on your situation, you may eventually qualify for other resolution options, such as an Offer in Compromise. Important to note that if your financial situation changes to where you do not have disposable income to pay on the tax balance, you may qualify for what is known as Currently Not Collectible status.

For more information, please read the recent blog posts:

• “Will Using a Partial Payment Installment Agreement Help Lower Your Tax Debt?“
• “What Are My Options If I Owe Back Taxes?“
• “The Importance of Investigating IRS Records in Determining Best IRS Issue Resolution to Use“

What Are Streamlined Installment Agreements?

Streamlined Installment Agreements require you to pay the entire balance within six years or before the collection statute of limitations expires, whichever is sooner. You can avoid a tax lien if your balance is less than $50,000 or if you can pay the balance down to less than $50,000 before establishing the streamlined installment agreement.

If your unpaid balance is between $25,000 and $50,000, the IRS won’t file a tax lien if you allow the IRS to take installment agreement payments directly from your bank account or wages.

If your tax balance is $50,000 or greater, the IRS will automatically issue a Federal Tax Lien to you. If your balance is $50,000 or less and your CSED is greater than 84 months, you can still get the streamlined status (more on below) under an 84-month plan if you have an automatic direct debit or payroll deduction setup. If you do not choose either of these automatic payment options, the IRS may set up a federal tax lien against you.

Can the IRS Revoke my Installment Agreement?
The IRS can revoke any installment plan and give you a default status. A default status will put you back to the collection point you may have initially been in or could soon become into, such as tax liens, asset levies, and wage garnishments. You will most likely find yourself in IRS default status when:

• You miss payments.
• You do not file a tax return for the current year.
• You have unpaid taxes due.
• Your provided inaccurate information during the IA process to IRS, or as listed in PPIA, your financial position has changed, allowing the IRS to increase your payment amounts.

To get back in compliance, you must endure the rigorous process of renegotiating your PPIA or IA from a lesser position. In contrast, IRS will renegotiate from a more stringent position due to the default.

Get Help Applying for a Partial Payment Installment Agreement or Regular Installment Agreement with Trusted Representation at your Side!

PPIAs and IAs can be complicated to set up. Harmon Tax Resolution, LLC can assist you throughout the process. At Harmon Tax Resolution, LLC, an experienced multi-licensed tax attorney-CPA-IRS EA will ensure you get the complete representation you deserve. For a Free Consultation, Call Today @ 772-418-0949 or complete the Online Inquiry Form so that you can sleep well tonight.

Let Us Help Put your Tax Worries Behind You So You Can Move on to Life’s Better Things! Make the Call Today, and Steer Your Own Path Tomorrow!

A Partial Payment Installment Agreement (“PPIA”) allows you to pay off your tax debt for less than the total amount you owe. This agreement puts you on a monthly set amount payment, which then ceases as of the Collection Statute Expiration Date (“CSED”). Once the CSED has occurred, any tax balances tied to this date are not collectible, and the IRS dismisses any remaining portion of the balance owed.

In essence, a PPIA will reduce tax debt and affords you a set monthly payment plan. A PPIA can save money; however, it is a complicated process involving strict criteria for qualification.

Are you considering if this option is right for you? Would you like to see if you qualify for this payment plan? Will Harmon, tax attorney-CPA-IRS EA of Harmon Tax Resolution, LLC, can help you decide if a PPIA is ideal for your situation. And if so, he can guide you through the application process. Here’s the critical information.

What Is a Partial Payment Installment Agreement?

Under a Partial Payment Installment Agreement (“PPIA”), the taxpayer makes monthly payments towards the tax debt up until the Collection Statute Expiration Date (“CSED”), which ordinally, the CSED period is for ten years after the date the tax was assessed. The CSED limits the time frame the IRS can collect on the debt. A PPIA creates a payment plan which ends when the CSED ends. Any remaining applicable tax balance is then removed by the IRS.

How Partial Payment Plan Installment Agreements Work

Here’s an example: Hypothetically, a taxpayer owes $30,000. They can only afford to pay $200 per month, and the collection statute expires in four years. They will make the $200 monthly payments for 48 months if they qualify based on their situation. At that point, the CSED expires, and even though the taxpayer has only paid $9,600, they won’t owe any additional money. In essence, they cut $20,400 off their tax bill.

PPIA seems ideal for those who qualify; however, there are stipulations with the plan one should consider. With PPIAs, the IRS reviews the taxpayer’s financial situation every two years. In the proceeding example, let’s say the IRS investigated the taxpayer’s finances after the first 24 payments. The IRS concluded that the taxpayer was earning sufficiently more money where the taxpayer could afford $500. Based on their new income determination, the IRS has the option to increase the monthly payments to $500/month for the last two years of the plan. Therefore, it’s essential to consider what possible changes may occur throughout the life of the PPIA period.

In addition to income and expenses, the IRS also factors your equity situation. Let’s say that when the IRS looks over your situation and discovers that you inherited an additional property home from a relative, the IRS can demand that you borrow against this home or sell it and use the proceeds to pay off some or all the tax debt. The ability of the IRS to enforce against acquired equity is an area of crucial concern to the partial payment installment agreements.

Should I Enroll in a Partial Payment Installment Agreement?

You should consider this program if you cannot afford to pay your tax debt under a payment plan before that Collection Statute Expiration Date. Here are some other indicators which may indicate that you should apply:

• You are unable to pay your tax bill in full.
• You don’t have any assets or equity in them that you can sell or borrow from to pay your tax debt in full.
• You are unable to acquire a loan to pay off your tax debt.
• The traditional IRS Installment Agreement monthly payment is unaffordable.
• Your IRS Offer-In-Compromise proposal was rejected.
• You cannot obtain Currently Not Collectible status or qualify for hardship status.

The PPIA is ideal for people who can’t afford to pay their tax debt in total but at the same time are unable to qualify for hardship status. The PPIA falls somewhere in between either of these options; however, strict criteria must be met to qualify. Talking to a qualified tax attorney-CPA will guide you on whether this is the right option to pursue.

Partial Payment Installment Agreement Requirements

Here are the qualifications for this plan:

• The tax Balance owed must be at least $10,000
• Establish that you don’t have assets that could be sold to pay the tax debt.
• Show that you cannot afford to make the monthly payments under a base IRS Installment Agreement.
• The tax debt under consideration was not covered under a previously approved IRS Offer-In-Compromise (“OIC”). Once the tax debt is approved under OIC, you cannot opt out of the Partial Payment Installment Agreement.
• You are currently not in bankruptcy.
• You must comply with tax filing requirements, federal tax deposits, and estimated tax payments.

The IRS will review your financial situation every two years during your PPIA. If your finances change, the IRS may require a larger monthly payment or you must pay off the balance in full.

Ideally, if you are approved, it is recommended that you agree to set up a monthly direct debit payment from your checking account or even have payments taken directly from your paycheck.

How to Apply for a Partial Payment Installment Agreement

The IRS requires you to provide complete and in-depth information to establish your qualification for approval for PPIA. This information is completed on several forms; IRS Form 9465 (Installment Agreement Request), IRS Form 433A (Collection Information Statement for Wage Earners and Self-Employed Individuals), or 433B (Collection Information Statement for Businesses). This form will report all your assets, liabilities, income, and expense items. Some expense items may be subject to IRS limitations. However, there may be justification, which, if adequately advocated for, may allow certain overages to be accepted by the IRS. A tax attorney-CPA could help tremendously secure the best agreement possible with the IRS.

What the IRS Uses to Determine Your Monthly Payment

The IRS representative will review the application and may request additional information. The amount of the tax debt will often determine the level and depth of inquiry. The IRS representative may request information not listed within the typical IRS request forms or even make inquiries regarding income or expense fluctuations of 20% or more.

The IRS goes through financials to determine your equity component. They then decide whether certain assets should be sold or loans should be made against them. After this, the IRS calculates your monthly payment to be made.

The monthly determination is based on strict adherence to IRS expense standards, determining how much you can afford. The IRS standards will determine how much of your excess income will be used in the payment calculation. The standards are based on detailed guidelines that assign expense criteria to the national and regional standards. Certain expenses will fall under one of these types. IRS is very strict with its standards applications.

For example, suppose the amount of your car or housing payment exceeds the IRS standard listings. In that case, the IRS will only allow you to use amounts up to the standard and not the excess when determining allowable expenses. Many of your basic expenses will fall under the IRS guidelines. The IRS is very inflexible with allowances outside of its guidelines. This is an excellent reason to have a knowledgeable tax attorney-CPA working with you to ensure the IRS adheres to the greatest allowances possible in your case.

If it turns out that your allowable financial listings result in an inability to pay at least $25 a month payment, you may want to see if you qualify for hardship status. If you qualify, the IRS will cease collection until the statute expires or your financial situation changes before the collection expiration date.

What to Consider if the IRS Calls for Selling Assets within the Partial Payment Installment Agreement

The IRS may require you to sell assets or take a loan against them to cover part of your tax liability. For example, if your tax debt is $25,000 and you have a brand-new boat, you’ll probably be required to sell it or take a loan. Only a very minimal amount of assets is excluded from this regulation.

There may be some situations that allow you to avoid selling your assets or borrowing against them:

• The assets have minimal equity.
• There is no market to sell the asset to.
• Unable to obtain an equity loan from a creditor
• Co-ownership of the asset by a spouse who is not liable for tax debt and is unwilling to take a loan out on the asset.
• The asset is required for income generation needed for the PPIA plan.
• You would suffer severe economic hardship from selling the asset.

It would be prudent to consult with a tax attorney-CPA if you plan on selling your assets to help ensure you’re making the best choice and negotiating ideally with the IRS.

Make Sure to Consider All of Your Options.

There may be other options that would better resolve your tax situation.

Partial Pay Installment Agreement (PPIA) vs. Offer in Compromise (OIC)

A PPIA and an OIC allow you to settle your tax debt for a lower amount than you owe. In either case, the IRS will agree to pay your tax debt for less than you owe. After completing all the terms of either program, the tax debt is gone permanently.

Additionally, either program has strict application criteria and completes comprehensive, detailed personal/business financial 433 forms. The approval rates are not high for either program. If you want to get approved for either of these programs, you should consider working with a tax attorney-CPA.

Bear in mind there are significant differences between a Partial Pay Installment Agreement and an Offer In Compromise, which are essential to consider. Here they are:

• Time Frame of Payments

An Offer In Compromise – Inability to Pay requires you to pay the offer in a lump sum or monthly payments over 24 months. With a PPIA, you make payments until the collection statute expires. The time could vary from a couple of years to many years.

• Understand Your Financial Situation

When you get an offer in compromise, you must comply with tax filing and payment obligations for five years. For instance, you must file your returns and make your estimated quarterly tax payments if required. If you don’t, the IRS can rescind your offer and demand full payment of the tax debt. However, the IRS can’t take away the offer with an OIC if your financial situation changes.

In contrast, if you have a PPIA, the IRS reviews your case every two years, and you may have to pay the entire tax liability if your situation improves. A PPIA might save you money in the long run if your financial situation is stable. Still, if you believe your financial situation will improve during the tax statute expiration time frame, OIC may be better for you. It’s crucial to under your financial situation presently and in the future as well as possible when determining which plan may work best.

• Approval Rates

Generally, the IRS tends to approve Partial Payment Installment requests at higher rates than OICs. OICs, on average, only get approved 33% of the time. When you talk with a tax professional, they will know which programs you’re likely to qualify for. The IRS is the final arbitrator on any tax resolution case; however, you significantly increase the situation by working with a seasoned tax attorney-CPA-IRS EA who specializes solely in working with tax resolution clients.

Should You Avoid Applying for an Offer in Compromise?

No, conducting a proper investigation is prudent to determine what would work best in your situation. It may be that the Offer In Compromise terms works better than a PPIA. To determine which tax relief option is best for your case, you should consult with a tax attorney-CPA. They can use their experience and knowledge to engage the problem correctly and steer you to the best IRS resolution option that fits your needs and finances.

In addition, the IRS may deny your PPIA application and direct you to apply for an Offer In Compromise if IRS believes an Offer In Compromise would be better for you.

Get Help Applying for a Partial Payment Installment Agreement

PPIAs are complicated to set up. For those in Port Saint Lucie, Fort Pierce, and Stuart who are looking for a tax attorney to help with a stressful tax situation, Harmon Tax Resolution, LLC can provide vital assistance to you throughout the process. At Harmon Tax Resolution, LLC, an experienced multi-licensed tax attorney-CPA-IRS EA will ensure you get the complete representation you deserve. Call today so that you can sleep well tonight.

Certain taxpayers are surprised that they owe additional income taxes yearly even though their employer withholds taxes from their weekly paycheck. Having an outstanding tax debt is not as uncommon as you think, and there are many reasons it could happen. About 24% of all Americans owe back taxes. If you’re among them, you know how nerve-racking it can be, whatever the amount.

Although sometimes it may seem that way, the Internal Revenue Service (“IRS”) is not out to maliciously target you. Since some of the tax code is confusing, it is easy to make mistakes; even the IRS makes them. It is essential to recognize this to remain calm when dealing with this situation.

Just getting a notice from the IRS can be unnerving. If you don’t agree with the IRS’s assessment of a tax owed or don’t understand the IRS’s position, the best approach is to write out your points and questions methodically. This purpose is to put your information and questions into a concise format to allow a conducive discussion with the IRS.

If you are responding in writing, include your name, social security or tax ID, and the notice’s reference number, which you can find in the upper right-hand corner of the first page of the notice.

Please remember that the goal is to resolve the issue quickly; how you engage the IRS personnel could assist or impair this. Your issue will be addressed by an individual and not a faceless careless entity. Being polite and cordial will make your issue more likely to be addressed and resolved.

If your situation entails owing an undisputed tax debt to the IRS and you cannot pay it, you have options. Ignoring the debt is never viable since the tax debt will not go away and will increase with additional penalties and interest. Eventually, your situation will be compounded by the IRS taking a more aggressive approach involving the issuance of liens followed by levies and or garnishments. You could even have your passport taken from you.

Dealing with the IRS in the same manner as described earlier to devise a payment arrangement known as an installment plan is a viable option. The IRS has several types of installment plans, each of which is deviated based on assessed tax amounts owed. The information-gathering requirement for each type varies as well.

Suppose you’re in a financial predicament where you cannot pay basic living expenses and the IRS tax debt. In that case, you may qualify for other options, such as being placed into a Currently Not Collectible Status (“CNC”), where the IRS will halt collection activities. In contrast, your financial situation remains as such. Under this plan, the ten-year Collection Statute Expiration Date (“CSED”) continues to run, and once you reach the CSED for an assessed tax, the IRS can no longer collect the debt, and it gets removed from collections.

Other options may include qualifying for a form of an Offer In Compromise (“OIC”), where there is a settlement agreement to pay the debt for less than the original amount. OICs are considered by the IRS when tax liability or collectability of the debt is in doubt. In other words, if they’re not sure about how much you owe or if they believe you might not ever pay, the IRS could settle for a type of OIC.

In addition, you may qualify for a Partial Payment Installment Agreement (“PPIA”) which allows for a lesser payment. This is like OIC consideration, where one cannot pay the entire tax balance owed before the CSED. In some cases, this is a better option and an OIC.

Regardless of the plan, you must comply with your tax return filings. Otherwise, you will be ineligible. Generally, six years is how far back you have to comply with filing your tax returns. In some cases, the IRS could require beyond that.

Most installment plans where full tax debt payment is to occur can be set up with the IRS without too much headache. However, if you are dealing with an OIC, PPIA, or CNC, it is highly recommended that you seek the help of a qualified tax resolution firm like Harmon Tax Resolution, LLC. You will deal directly with a multi-licensed Tax Attorney-CPA-IRS EA who will ensure your case is adequately represented. In addition, any required tax compliance work can be addressed as well.

Do you owe back taxes? Are you doing anything to fix the problem? You can have a free consultation directly with a multi-licensed Tax Attorney-CPA-IRS EA. Not taking action doesn’t solve the problem make the call today and sleep well tonight.