Circumstances change, and you may need to change the terms of your existing IRS installment agreement. Some terms you may want to modify include the following:
- Your monthly payment amount
- Your monthly payment date
- Your payment method
You can make some of these changes online. Small changes, such as adjusting your payment date, shouldn’t cause any problems.
If you want to reduce your monthly payment beyond a certain amount, your changes will be rejected, and you’ll need to submit a new collection information statement in order to qualify for a lower monthly payment amount.
Changes to Your Financial Situation
You’ll only be permitted to lower your minimum monthly payment if your financial situation has changed. This could involve a loss of income or an unavoidable increase in expenses.
Your new collection information statement should reflect these changes. In addition, you may need to provide proof that your financial situation has changed.
Keep in mind that if you lower your monthly payment, you may need to extend the length of your repayment plan. You will also end up paying more overall in interests and penalties.
If your financial situation has changed drastically, you may want to consider applying for an Offer in Compromise (OIC). OICs are typically used when a taxpayer has experienced a permanent change in their financial situation, rather than a temporary setback. For example, if you have become permanently disabled and can’t work, your collection potential will be lower and you may want to consider submitting an OIC.
Avoid Payment Plan Termination
If you need help modifying your existing IRS payment plan, contact a tax resolution attorney. If you miss payments, you’ll risk a payment plan termination.
When this happens, you have a limited time—possibly as short as 30 days—to correct the default and reinstatement the plan. If you don’t reinstate your plan, the IRS can move forward with enforced collection actions, such as bank account levies or wage garnishments.
If you do reinstatement the plan, you may have to pay a reinstatement fee.
Don’t miss payments or stay in a payment plan that’s causing financial difficulties. Consult a tax attorney to learn more about your options.
Contact The Gartzman Law Firm to speak with an Atlanta tax attorney about your case. Request your consultation by calling (770) 939-7710.