Jack Levy CPA & Accountant, Albany NY
Certified Tax Resolution Specialist
Call us for Free Consultation For all Your Tax Problems,
including Back Taxes, Payroll Taxes And Unfiled Returns.
 Installment Agreements with the IRS is used to pay tax debts over a certain period of time, generally
not more than 60 (5 years) although the IRS is legally allowed to collect over 10 years.
Installment Agreements are used where the taxpayer has an ability to pay back taxes over a period to time, based on financial analysis of the taxpayer.
The financial analysis is based on Collection Standards. Those Standards are averages of costs that individuals living in various areas of the nation are likely to incur.
Standards are set for food and clothing, housing and utilities, transportation costs and health care (allowances for health care are set, not on standards, but on actual experience of each individual, plus legally mandated payments such as family support, student loans and judgments.
The allowances indicated in the Standards are summed and then subtracted from monthly after tax income. Any excess of after tax income over the allowance is referred to as 'ability to pay' and is the amount the IRS will demand each month in an Offer in Compromise or Installment
Agreement. If 60 payments of the 'ability to pay' amount is less than the tax debt the IRS will consider an offer to pay the lesser amount.
If the 'ability to pay' amount is greater than the tax liability, the IRS will demand their money in an Installment Agreement over not more than 5 years.
Sizes for Installments Agreements
Installment plans come in two sizes. Anything over $25,000 demands financial disclosure on Form 433 A and B. Less than $25,000, financial disclosure is not required.
Any financial disclosure is a road map to the location of taxpayer assets. Financial disclosure should not be given unless absolutely necessary and it may be advisable to pay debt down to less than $25,000 in order to avoid disclosure.
Contact us for a free consultation.
Contact us for a free consultation and we will help you with your tax problems,
back taxes or unfiled returns.
Do not represent yourself. As you won’t go to court without an attorney.
The I.R.S. is your adversary in these matters.
|
