Tax time brings lots of anxiety for many Americans. Not knowing whether you will get a refund or owe can be nerve-racking . If you expect to owe this year, or are facing old tax debts that haven’t been paid, there is no need to worry. The IRS offers a plan to help you repay your tax debts without sending you into financial ruin.
Payment Plan Basics
The IRS installment plan allows for you to repay your debts in small increments over a period of a few years. The general conditions for qualifying for the installment plan are that you (a) owe less than $25,000, (b) are current on filing the returns and (c) the debts are not suspected or confirmed to be fraudulent.
There are three basic types of the IRS installment plan. First, is the guaranteed installment plan. This plan give you 30 months to repay your debts of $10,00 or less. Second, is the streamlined installment plan, which gives you 60 months to repay as much as $25,000 in tax liabilities. Last, is the financially verified installment plan. This plan is similar to the streamlined plan, but is reserved for those who owe more than $25,000. Under this plan, the IRS will require your financial position including your valued assets to be reviewed prior to accepting the agreement.
Applying for any one of these plans can be confusing and all require numerous documents in order to process the request. Seek counsel from a tax attorney or IRS professional before pursuing a tax debt relief solution.