IRS Installment Agreements

Guaranteed Installment Agreements

An IRS Installment Agreement allows you to pay off your tax debt in smaller amounts and over a period of time or by the Collection Statute Expiration Date (CSED). Installment Agreements carry an interest rate and there are penalties, which can be accrued in the process of paying off tax debts.

A Guaranteed Installment Agreement should be used if you are unable to pay your tax debt in full. It is pertinent to remember that you still need to file for taxes owed this year and for previous years.

A Guaranteed Installment Agreement can be granted without managerial approval. To this end, you only need to make a call to the Automated Collection System (ACS), to seek for IRS approval.

There are certain requirements to meet before you can obtain the Guaranteed Installment Agreement. They include:

  • You should owe $10,000 or less in taxes (excluding penalties and interest); this is for individual taxpayers only.
  • You should owe only income tax and not any other types of tax.
  • The total amount should be paid within a period of three years or by the CSED.
  • You should not be in Bankruptcy Proceedings.
  • Over the last five years, tax returns should have been filed on time, including that for the present year.
  • Over the last five years, you should have no other Installment Agreements present.
  • You will need not miss payments during the Installment Agreement period, and you will need to make sure to pay and file on time your tax returns in subsequent years.
  • You should not be able to pay immediately out of savings or any other means.

The Installment Agreement should be paid over a period of three years (36 months), your monthly payment can be lower than the $25 minimum, but it is advisable that you pay the most you can monthly so that you can pay less interest and penalties (the longer it takes for you to pay off, the more your interest and penalties accrue).

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