Completing your tax return only to discover you owe the IRS money can be stressful, especially if you’re not able to pay the entire amount by the tax deadline. Unfortunately, if you don’t pay on time, the IRS has the authority to garnish your wages and seize your assets. To avoid this, request a payment plan that will allow you to pay your tax bill in installments. Below are the answers to some of the most common questions taxpayers have about making this arrangement.

What to Know About IRS Payment Plans

Who qualifies for a payment plan? 

Eligibility for IRS payment plans depends on how much a person’s tax liability is. Short and long-term agreements are possible, but to be approved for either, all current and previous tax returns must be filed. You’ll also need to resolve any missing payments you already owe and you might be required to provide a financial statement. 

What types of payment plans are available?

There are a few different payment plan options to choose from. If your bill is less than $10,000, you can opt for a guaranteed installment agreement to be paid within three years or less.

For larger tax debts, a streamlined installment agreement may be set up for a maximum of six years. If you believe you won’t be able to afford the full amount you owe, you may also apply for a partial payment installment agreement, which allows you to pay a portion of the debt.

How do I set up a payment plan?

IRS payment plans can be set up online, over the phone, in person, or by mail. If you decide to apply by mail, you’ll need to fill out and send in Form 9465. You’ll need to provide your name, mailing address, birth date, social security number, the filing status on your tax return, and the amount you owe. 

What happens if I miss a payment?

If you miss a payment, the IRS may send you a notice that they’ll be terminating your agreement and levying your assets. This can result in greater financial hardship and negatively impact your credit. In the event you’re unable to keep up with your original arrangement, it’s in your best interest to call the IRS and negotiate a different payment amount.

For help establishing an IRS payment plan, consult a tax professional at Selph and Friday, CPA. In addition to preparing accurate tax returns, they offer valuable assistance when dealing with the IRS. For more than 30 years, they’ve been working with residents throughout the Texarkana, TX, area to help clients maximize their credits and deductions, as well as settle tax debt. Call (903) 792-0281 to schedule an appointment. Visit them online to learn more about their services.