IRS payment plans and installment agreements in Nashville

The amount owed decides which door you use. An individual who can pay within 180 days and owes less than $100,000 in combined tax, penalties and interest can set up a short-term plan online, with no setup fee. An individual who owes $50,000 or less and has filed all required returns can apply online for a long-term plan paid monthly.

The IRS charges setup fees on long-term plans. Applying online costs $29 with direct debit or $69 with another payment method, and the same plans cost $107 or $178 when set up by phone, mail or in person. Low-income taxpayers pay a reduced fee that may be reimbursed, and the fee is waived for a low-income direct debit agreement.

Businesses can’t apply online at all. The IRS sends them to its business line or to a Taxpayer Assistance Center, and a business balance is set up with an IRS employee from the start.

Above $50,000 the payment plan is negotiated rather than requested online, and it rests on a financial statement. The IRS asks for Form 433-F or Form 433-A, or Form 433-B for a business, and compares your income with the expenses it allows. The monthly figure that comparison produces is what the IRS expects to receive.

The law allows agreements that won’t pay the full balance. Under 26 U.S.C. § 6159(a) the IRS may enter an installment agreement that facilitates “full or partial collection” of a liability, and a partial agreement runs until the collection period on each year ends. Whether that, a full-pay plan or an Offer in Compromise fits depends on the numbers and the dates.

The firm’s view of this stage: “Effective representation requires understanding how the IRS evaluates financial information and applies collection procedures—not simply selecting a tax-relief program.”

A payment plan generally stops levies. Under 26 U.S.C. § 6331(k)(2) the IRS may not levy while an installment agreement request is pending, while an agreement is in effect, and for 30 days after a request is rejected or an agreement is terminated, plus any appeal period.

Penalties slow down without stopping. For an individual who filed the return on time, the failure-to-pay penalty drops from 0.5% to 0.25% a month for each month an installment agreement is in effect [§ 6651(h)]. Interest continues at the normal rate until the last dollar is paid, so a longer plan costs more over its life than a shorter one at a higher payment.

Three things can end an agreement under 26 U.S.C. § 6159(b)(4): missing an installment, failing to pay another tax liability when it comes due, and failing to give the IRS updated financial information it asks for. The second is the easy one to trip over, because a new balance for the current year counts against the old agreement.

That is the reason the fifth step of the firm’s process is ongoing compliance: future returns filed on time, estimated payments made, payroll deposits current. A proposed termination can be appealed through the Collection Appeals Program on Form 9423, within the time stated in the IRS notice.

April L. described the experience of working through it with Tyrone: “He made sure that I understood everything and that I was comfortable with the process.” This is general information, and the right plan depends on your own figures.

Tyrone J. Taylor starts a payment plan the way he starts every case, with Form 2848 and the transcripts. Those confirm the balance year by year, the collection statute date on each, and whether every required return is filed, because missing returns block a plan. Where they are missing, the unfiled returns come first.

For a balance above the online limits, he then prepares the financial statement, checks the IRS’s allowable expense figures against your actual budget and proposes a payment the numbers support. The negotiation itself is with the IRS employee who holds the account, whether that is ACS or a Revenue Officer. More on how cases run is on the IRS representation page.