Introduction

Partial Payment Installment Agreement payments are sent monthly to the IRS. However, some tax bills have a statute of limitations that runs out before the PPIA payments are fully paid. You can settle your tax debt for slighter than you owe by entering into one of these arrangements and avoiding a significant upfront payment. However, meeting the requirements to get one of these grants is not always straightforward. A complete application and financial disclosure must be sent to the IRS. Then, you could need to liquidate some of your possessions or agree to push back the deadline, depending on the specifics of your case. You may get the information you need to apply for a PPIA and start the process by reading this book.

Determine If You Qualify

To be eligible for a PPIA, one must follow the IRS's guidelines. To qualify for this choice, you need to owe the IRS at least $10,000, but remember that this amount does not just contain your tax bill; interest and penalties are added to the original amount. You can't have ever had an offer in compromise accepted by the IRS or be currently in bankruptcy. Your assets will be a major factor in determining whether or not you are accepted. Either you lack the means to liquidate them, or their equity is insufficient to meet your IRS liability if you did. And you can't use them as security to get a loan since there isn't enough equity.

Don't Try To Go It Alone

Although the PPIA procedure isn't overly complicated, you may seek the advice of a tax expert who has experience resolving tax arrears. The Internal Revenue Service (IRS) can be difficult to negotiate a manageable monthly payment unless you know what you're doing and thoroughly understand your options.

Determine How Much You Owe

Before talking to the IRS, you should know how much money you owe in back taxes. You can check the sum by calling the IRS or obtaining copies of your tax returns or transcripts from the website, but you should be prepared for some bad news. Remember that this sum will include the original tax owed and any penalties and interest accrued on the overdue amount.

Completing Form 9465

To request an instalment payment plan, please fill out Form 9465. To suggest a monthly payment amount to the IRS that is both reasonable and acceptable, you need to seek the assistance of a tax specialist. This form allows you to communicate your financial situation to the IRS. If you owe money to the IRS in taxes, you should know how much is owed, how long the IRS has to try to collect it legally (the statute of limitations), and how likely they will be able to do so. Fortunately, a qualified tax expert can walk you through this equation.

Completing Form 433-A

The two applications share the same foundational data, so now is a great time to choose which tax debt solution is best for you.

Reach Out to the IRS

Your tax debt could lead to a request for additional information, including the value of any assets you own that could be liquidated to settle the bill. When feasible, you may need to take out a loan secured by the equity in your property.

Make Your Payments

If the IRS grants you a PPIA, you must keep up with the required monthly payments. In addition to the traditional payment methods, we accept direct debit from a bank account and electronic funds transfer. EFTPS, Direct Pay, and automated withdrawals are the most secure payment options. Your check may go missing in transit when sending a payment to the IRS Service Center. If you pay electronically, you may rest assured that the IRS will receive your money quickly and without clerical error.

Conclusion

If you have a standard payment plan, you have six years to pay it off. The IRS sometimes allows taxpayers seven years to file their returns. The agency might demand a more rapid repayment schedule in other situations. A PPIA may allow for reduced payments if you cannot make the whole amount at once. Because it takes longer to pay off your tax liability when you make smaller payments, you may not be able to settle your tax debt in full before the deadline. For those who qualify for this programme, the Internal Revenue Service (IRS) reduces the amount owed and extends the deadline by which some of the tax must be paid. For the sake of illustration, here's a simple case.