In this article, we walk you through IRS installment agreements and what to do if you can’t afford to pay your back taxes.

Though paying your taxes through an installment agreement is just one of many tax relief options, you likely have other options and might be able to settle with the IRS or lower your amount owed. We encourage you to reach out to our firm for a tax relief consultation to determine your options.

HOW THE IRS IS DEALING WITH COLLECTIONS DURING COVID-19

COVID-19 forced a lot of things to shut down or modify how they do business, including the IRS.

Not only are they busy dealing with processing their usual tax returns, the IRS was tasked with processing the stimulus payments for millions of Americans.

To top it all off, they’re scrambling trying to adjust to the new filing deadline, and a lot of their workforce is working from home, making things slower than usual.

Because of this, and due to the economic hardship millions of Americans are experiencing, the IRS announced it’s “People First Initiative”.

The IRS is pursuing unprecedented actions to ease the burden on people facing tax issues. These new changes include issues ranging from postponing certain payments related to Installment Agreements and Offers in Compromise to collection and limiting certain enforcement actions.

Due to COVID-19, the IRS isn’t processing paper returns right now as they deal with distributing coronavirus stimulus checks.

They also extended the filing deadline for your 2019 taxes another 3 months from the usual filing deadline, making the official deadline to file your taxes July 15th, 2020.

THE BILL COMES DUE

Despite their immediate actions, the IRS will soon flip the enforcement switch back on, and come July 15th, a lot of people who made higher income in 2019 will likely owe back taxes.

At the time you file, you need to send in payment for any taxes due. Failure to pay your tax bill immediately often results in penalties and interest on the balance due after July 15th.

If you find yourself unable to pay in full, the IRS offers installment agreements to taxpayers who owe a balance to allow them to pay their tax burden over a period of time.

HOW INSTALLMENT AGREEMENTS WORK

The IRS divides their installment plans by taxpayers who owe more than $50,000 and less than $50,000.

IMPORTANT: We highly recommend readers to reach out to our firm first. Our clients never have to talk to the IRS, and a properly structured installment agreement made by us can save you money and time in the long run. You might also be eligible for other relief programs or get your penalties and interest forgiven. Reach out to our firm today for a consultation. [add your contact page link].

Balance Less Than $50,000

Taxpayers owing less than $50,000 may request an installment agreement via the IRS website, by mailing Form 9465-FS Installment Agreement Request or by phone at 1-800-829-1040. You need to provide your Social Security number, date of birth, caller ID from your recent IRS notice, PIN number or AGI, bank address, employer address and the proposed monthly payment amount.

Balance Greater Than $50,000

Taxpayers owing more than $50,000 may request an installment agreement by filling out form 433-F Collection Information Statement. Filling out the form requires information regarding your bank accounts, lines of credit, real estate, total number of dependents, assets, credit cards, wages, non-wage household income, monthly living expenses, down payment amount and proposed monthly payment.

IRS Installment Agreement Details

Installment agreements require a minimum monthly payment of $25. The IRS requests that you include your name, address, Social Security number, phone, tax year and return number on each payment issued. Installment lengths vary from 120 days to 60 months depending on your ability to repay.

IRS Installment Agreement Fees

Installment agreements that take more than 120 days require a setup fee. The IRS charges a setup fee for direct debit agreement or for a standard agreement. You may get a decreased fee if you meet their low income guidelines. The IRS charges a reinstatement fee if you don’t pay your bill and your installment agreement goes into default.

Our firm specializes in tax resolution. We also serve clients virtually so don’t hesitate to reach out. If you want an expert tax resolution specialist who knows how to navigate the IRS maze, reach out to our firm and we’ll schedule a no-obligation confidential consultation to explain your options to permanently resolve your tax problem.

The post Can I Pay Installments on Federal Income Taxes I Owe If I Can’t Afford to Pay it All at Once? appeared first on 201Tax.

Businesses who had record sales at the beginning of March found themselves near insolvency by end of March. Despite a $2 trillion stimulus bill, the economy will undoubtedly take a bit hit and take time to recover.

People who were already in debt and behind on their taxes are finding it really difficult to keep up with the day to day expenses, let alone cover past bills.

As an expert tax resolution firm we help people who find themselves behind on their taxes, often through no fault of their own. In this article, we’ll walk you through what you need to know about taxes and the COVID-19 pandemic, including tax relief options you can take advantage of.

Note; If you were negatively affected financially by the COVID-19 pandemic and you find yourself behind on your taxes, contact us for a free, no-obligation, confidential consultation.

Here’s What You Need To Know About Tax Relief And Coronavirus

New Filing Deadline: July 15th 2020
The IRS announced late March 2020 that they’d be extending the filing deadline for the 2019 tax year. The new deadline is now July 15th and the IRS won’t be tacking on penalties or interest, regardless of how much taxes you owe.

This gives you a bit more time to gather your documents, search for new deductions, and file and pay your taxes. It might not be true tax relief but it’s a good opportunity to seek expert advice and a better tax resolution option. As of this writing, this is the only major new tax relief option for the average taxpayer.

Settle Your Tax Debt For Less Than You Owe

The IRS has a program that allows you to settle your tax debt for less than you owe IF you meet certain criteria. They take a look at the following:

Ability to pay;
Income;
Expenses; and
Asset equity.

With the coronavirus affecting taxpayers income and asset values dropping, it creates a favorable case for an Offer in Compromise. It’s important to structure it properly in order to have a good chance of settling for less than you owe. A qualified tax resolution firm like ours can help

You Can Get A Break From Paying Your Back Taxes

If the IRS agrees you can’t both pay your back taxes and cover your reasonable living expenses, it may be able to place your account in Currently Not Collectible status.

You can request currently not collectible status by submitting the proper form and proof to the IRS of your income and expenses, as well as whether you can sell any assets you may have or get a loan. As you’ll need to be able to document your inability to pay, be sure to gather copies of all your bills, your most recent paycheck stubs, and statements detailing other sources of income such as alimony, pensions or investments.

Keep in mind that currently not collectible status applies only to your back taxes. You will still have to file tax returns, and you will not be exempted from paying current and future taxes. You will also continue to accumulate penalties and interest on your unpaid taxes. After a year or two, the IRS may review your status, and if you’re able to begin paying your back taxes, then you must do so. If you’re still not able to pay, then your status will be renewed.

What To Do Next?

There are other tax relief options that the IRS has under normal circumstances, and with coronavirus news changing literally every hour during the pandemic, it’s important to have the best tax resolution firm in your corner so you can get through these challenging times.

Remember, you’re not alone and you have options. More than 13 million Americans had already found themselves before the pandemic started, and many millions more will find themselves behind on their taxes.

Our firm specializes in tax resolution and our experts help during this COVID-19 pandemic. We also serve clients virtually so don’t hesitate to reach out. If you want an expert tax resolution specialist who knows how to navigate the IRS maze, reach out to our firm and we’ll schedule a no-obligation confidential consultation to explain your options to permanently resolve your tax problem.

The post Tax Relief and COVID-19 appeared first on 201Tax.