IRS Question Corner …
Question: I don’t think I qualify for the Offer in Compromise program. However, I’ve heard a little bit about the IRS’s Installment Agreement. What is that and how could it help me?
Answer: First, unless you have consulted with a qualified tax professional and he or she has advised you that you do not qualify for the Offer in Compromise program, do not assume you are ineligible.
The Offer in Compromise program is a powerful tool for taxpayers that can allow those saddled with tax debt to reduce that debt by pennies on the dollar!
But, for the sake of this Q&A session, let’s assume indeed you do not qualify for the Offer in Compromise program:
The Installment Agreement is exactly as it sounds: It allows you to pay down your IRS debt by making small monthly payments that over time will eliminate that debt entirely. Think of it the same way you might think of a car loan: a substantial amount of money to pay every month but not so substantial that your lifestyle must change drastically or you have to pull Suzy out of college.
After years of chasing deadbeat taxpayers, the IRS has learned that offering flexible programs can in fact be a very effective way of bringing more and more Americans into tax compliance. One reason many Americans in the past chose not to work with the IRS was simply because they did not have the money available to pay their debt. The Installment Agreement solves this by allowing taxpayers to pay off their tax debt piecemeal.
If you think you would benefit from this program, you should consult a qualified tax professional who will analyze your tax returns and determine exactly what you owe the IRS and then discuss such an arrangement with a tax agent.
I solve IRS problems like yours every day. I’m an IRS Problem Solver. For a free, no-risk consultation, please call my office at 818-774-1813.
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