If you owe money to the IRS and can`t pay it all at once, you may be eligible for an installment agreement. An installment agreement allows you to pay your tax debt over time, rather than in one lump sum payment.
Here are the steps you need to follow to make an installment agreement with the IRS:
1. Determine your eligibility: To be eligible for an installment agreement, you must first be current with all of your tax filings. If you haven`t filed all of your tax returns, the IRS will not consider your request for an installment agreement. You must also owe less than $50,000 in tax debt, including interest and penalties.
2. Submit Form 9465: You will need to fill out Form 9465, Installment Agreement Request, and submit it to the IRS. You can download the form from the IRS website or request it by calling the IRS toll-free at 1-800-829-1040. On Form 9465, you will need to indicate the amount you can afford to pay each month, the date you want to make your first payment, and the total amount you owe.
3. Choose your payment method: There are several payment methods available for installment agreements. You can choose to have your payments automatically deducted from your bank account each month, pay by check or money order, or pay online through the IRS Direct Pay system.
4. Wait for approval: Once you submit Form 9465, you will need to wait for the IRS to approve your request for an installment agreement. If your request is approved, the IRS will send you a notification letter that outlines the terms of your agreement, including the amount you owe, the amount you will pay each month, and the date your payments are due.
5. Stick to the terms of your agreement: It`s important to make all of your installment agreement payments on time and in full. If you miss a payment or make a partial payment, the IRS can revoke your agreement and take collection action against you.
In conclusion, if you are unable to pay your tax debt in full, an installment agreement may be a good option for you. By following these steps, you can make an installment agreement with the IRS and get on the path to paying off your debt. Just remember to stick to the terms of your agreement and make your payments on time to avoid any further problems with the IRS.