Houston, Texas • Seattle, Washington Tax Law Attorneys
Most people who owe back taxes to the IRS are unable to pay the full amount due in a single lump sum. The IRS recognizes this reality and offers a number of payment plan options which allow taxpayers to pay their past due taxes over time. Because interest and penalties continue to accrue until the balance is paid in full, it is, of course, in the taxpayer’s best interest to pay the balance as quickly as possible. If, however, that is not an option for you, a knowledgeable tax attorney who can help you identify the best alternative for your situation.
When the IRS evaluates a taxpayer’s financial information to establish an installment agreement, the amount of the monthly payment is based on the taxpayer’s "ability to pay." The problem is that the IRS’s definition of "ability to pay" frequently bears little resemblance to the average taxpayer’s actual budget because the IRS limits the amounts allowed for many typical household expenses. In addition, the forms and documents which must be submitted to execute any installment agreement can be confusing and overwhelming to many laypeople. An experienced tax attorney can help you navigate these waters and arrange a payment plan which reflects your current financial situation.
We, at Hammond Law Group, PLLC, will analyze your financial profile, facilitate the document production process, and negotiate a manageable payment plan under one of the following programs.
"Streamlined" Installment Agreements
Taxpayers who owe less than $25,000 and are able to propose payment terms which would fully satisfy the liability in 5 years or less qualify for the streamlined installment agreement program. Installment agreement requests in this program are subject to far fewer requirements and restrictions in terms of forms, documents, and allowed expenses.
"Non-Streamlined" Installment Agreements
Taxpayers who owe more than $25,000 do not meet the criteria for the streamlined program and are subject to a more detailed review of their financial situation to assess their ability to pay. Non-streamlined installment agreement requests must generally be accompanied by a number of substantiating documents, including bank statements, pay stubs, and utility bills. These requests also sometimes require a manager’s approval prior to consummation.
Large Dollar Cases
Installment agreement requests for taxpayers who owe more than $100,000 are reviewed by a special unit within the IRS and are subject to the highest degree of scrutiny. It is particularly critical that taxpayers who fall into this category be represented by an experienced tax attorney.
Partial Payment Installment Agreements
Taxpayers who are not able to offer payment terms which would fully satisfy their tax liability in 5 years or less may qualify for a partial payment installment agreement. This is a strategy which can result in the taxpayer paying less than the full amount due; however, the taxpayer’s finances are subject to a biannual review to determine their continued eligibility for the program.
Currently Not Collectible
Taxpayers whose financial profiles indicate that they are currently not able to make any payments toward their tax bill may qualify for "Currently Not Collectible" status. There are advantages and disadvantages to this strategy. A knowledgeable tax attorney can assess your current financial condition and determine if this is an appropriate option for you.
Contact IRS Payment Plan Attorneys at Hammond Law Group
The staff at Hammond Law Group, PLLC is experienced in executing all types of installment agreements. To schedule an appointment and learn how we can help you resolve your tax matter, contact the Houston, Texas IRS tax payment plan attorneys at the Hammond Law Group.
