INSTALLMENT AGREEMENTS

 

 

CLIENT is ASKING ABOUT INSTALLMENT AGREEMENT and PENALTIES & INTEREST associated with one.  What do I tell them?

 

Dear Client,

There are many benefits to an installment agreement with the IRS. You will be considered in good standing with the IRS and the collection action is stopped. The interest on the balance due is reduced to .25%. The failure-to-pay penalty is dropped in half.   Installment agreements are set up over 72-months.  In order to apply go to IRS.gov/OPA.

 

 

Info for AIC:

 

Types

• Short-Term (pay within 120 days)  – Less than 100k in combined tax, penalties and interest.
• Long-Term (72 months) – Less than 50k* in combined tax, penalties and interest and filed all required returns.

 

*If over 50k they need to pay down before requesting. 

 

If they have an existing installment agreement on prior year then combined total needs to be under 50k for both balances including combined tax, penalties, and interest. 

 

**Balances over 25k (individuals) or 10k (businesses) require payment by Direct Debit.

 

If not yet filed, then prepare Form 9465 in return.

If already filed, then tell them to apply online – IRS.gov/OPA.

 

***Fees are less if using online app - $31 vs $107

 

****TCD minimum fee is $1,000