Installment Agreement

The installment agreement is a payment plan between you and the IRS. The IRS has some flexibility regarding the payment amount as long as the debt will be paid off before the statute of limitations expire. If the amount due is small and you are offering large payments, it can be quite simple to get an installment agreement. The agreement comes with some strings attached, such as staying current on the filing and paying of future tax returns for as long as the agreement is in place. Penalties and interest will continue to be charged although the penalty rate is currently reduced during the installment agreement. The IRS charges a nominal fee to setup an installment agreement. For larger debts or those debts involving payroll tax issues the IRS may elect to assign a Revenue Officer (debt collector) to determine the maximum payment they can bet from you.

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