Your IRS payment plan should set you up for success when it comes to paying off your tax debt. But if you don’t negotiate an agreement that fits your budget, you could end up defaulting on your agreement or having other financial problems.
Consult with a tax payment plan attorney for assistance avoiding these common mistakes.
Monthly Payment Is Too High
If you have other debts or special expenses, you may find the base monthly payment amount to be a strain on your budget. The IRS will sometimes deviate from their base monthly payment amount—it just requires more work on your part to show them why they should do so.
Another great way to reduce your monthly payment amount is to make an initial lump-sum payment towards your balance. If you have an asset you can sell or borrow against, this initial payment can make the terms of your agreement easier to negotiate and comply with.
Not Seeking Penalty Abatement
Just because you’re using a payment plan, it doesn’t mean you shouldn’t explore other tax resolution options at the same time. If you can eliminate or reduce even a small portion of your tax debt, it can make a big difference.
Consider the following tax resolution methods in conjunction with your IRS installment agreement:
- Penalty abatement, including first-time abatement and for reasonable cause.
- All types of innocent spouse relief.
- Expiration of the collections statute for older tax years.
- Disputing the amount of any adjustments made by the IRS.
Failing to Negotiate Key Terms
Taxpayers sometimes miss the opportunity to negotiate key terms in their installment agreements. For example, the IRS may agree not to file a Notice of Federal Tax Lien against your property in the public records, but you may have to ask for this as part of your negotiations.
If the statute of limitations is nearing expiration for some of your tax debt, you could also be eligible for some forgiveness using a partial payment installment agreement. Some taxpayers aren’t aware of this option and don’t know when it applies to their case.
Get help negotiating your IRS installment agreement by contacting a tax attorney.
The Gartzman Law Firm offers tax settlement help for both federal and state tax debt, including installment agreement requests. Use our contact form to request a consultation with an Atlanta tax resolution attorney.