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IRS Payment Plans: Installment Agreements

Updated on March 30, 2011

Have you found yourself in trouble with the IRS? Did all those years of pretending April 15 was just some normal, random day where everyone else seemed a tad stressed finally catch up to you? Do you suddenly remember what a 1099 or a W-2 is?

Well, if you have a letter from the IRS telling you that you owe them more money than you have, don't throw it away. Take a deep breath, walk outside, scream, take a shot, call your mother. Then look at the letter again and see what life is telling you.

You and 16% of Americans failed to voluntarily report your income to the IRS as is required by federal law. The IRS figured it out and they want their money now. That is all that happened, and you can deal with it. If you owe under $25,000, you can now enter into a streamlined installment agreement with the IRS, no questions asked, no Form 433A or 433F. You don't have to tell them about your assets, where you work, or where you bank. This way, they won't get all mafia on your a$$ and hunt you down.

Are You Eligible? (You must meet all of these requirements.)

Did you...
If you said "yes", then...
acquire debt less than $25,000?
acquire debt more than $25,000?
figure out that you can pay in 60 months?
figure out that you cannot pay in 60 months?
file all of your required tax returns?

How to Enter Into An Agreement with the IRS Without Having to Answer Questions


I repeat, the IRS does not have to find out everything about you for you to enter into a payment plan with them. If your income tax liability to the IRS is under $25,000 and think you can pay that balance in five years, you are eligible to enter into an installment agreement via a streamline process. It's cheaper for them to do it this way, and they know they will get their money faster than if they individualize the process. Normally when you enter into an installment agreement, you have to provide personal documents like bank statements, recent paystubs, and verification of your living expenses. Take advantage of being just a number to government. Embrace your anonymity and pay back your taxes. After all, they are like death.

You don't even have to stand in line to get a piece of the action. You just have to call, tell them you owe under $25,000, and you want to pay it back in under five years using a streamlined process.

Here is How

  1. Make sure you are eligible. (See above.)
  2. Contact the IRS and confirm with the drone who answers the phone that you have filed all of your returns.
  3. If you have not filed all of your returns, at this point you must find out which you missed and file them. Ask the IRS representative what years you missed, then hang up.
  4. If you are still on the phone at this point, find out the year of your oldest tax debt.
  5. Ask the representative for the Collection Statute Expiration Date of that year. If it is within five years, it may mean you do not qualify. If you are confused, at this point you may want to contact a tax attorney if you have not already. They are pretty good at this stuff.
  6. Once you have verified your missing amounts and years and filed all of the necessary paperwork, come up with a monthly amount which will eventually cover your tax debt and call the IRS back. Propose this amount and ask for a streamlined installment agreement. You must cover your debt in 60 months. Note: You can propose this amount online and get an immediate response on the IRS website.
It is probably a good idea to find a tax attorney who can help you if you have a large amount of IRS debt. The Internal Revenue Code is essentially written in French pig Latin and its pages practically yawn for you, so it may not be a great idea to try to translate it yourself. But don't worry, the IRS really is not out to get you! Not yet, anyway! If you have made tax mistakes in the past, the best time to fix them is now, so educate yourself and know your options.


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