Types of IRS Installment Agreements
If you’re struggling to pay your tax debt in full, understanding the different types of IRS installment agreements can help you find a manageable solution. Victory Tax Lawyers offers free consultations and works with clients nationwide to negotiate the best possible payment plans with the IRS.
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There are several types of IRS Installment Agreements, each tailored to different financial situations and tax liabilities. Here are some common types:
Certified Public Accountant (CPA)
- Eligibility: You owe less than $10,000 in taxes, including interest and penalties.
- Features: Guaranteed approval if you meet the eligibility criteria. No need for a financial review, but you must agree to pay off the balance within three years.
Streamlined Installment Agreement:
- Eligibility: You owe less than $50,000 in taxes, including interest and penalties.
- Features: Simplified application process with minimal documentation. Allows up to 72 months (6 years) to repay the debt.
Partial Payment Installment Agreement (PPIA):
- Eligibility: You owe a substantial amount of taxes, but you can’t afford to pay the full amount over the standard 72-month period.
- Features: Payments are based on your ability to pay, considering your income and expenses. The IRS reviews your financial situation periodically and may adjust the payments accordingly.
Full Payment Installment Agreement:
- Eligibility: You can afford to pay your tax debt in full but need more time to do so.
- Features: You agree to pay the full amount you owe within the standard 72-month period.
In-Business Trust Fund Express Installment Agreement (IBTF-Express IA):
- Eligibility: Businesses with unpaid payroll taxes (trust fund taxes) may qualify.
- Features: Designed for businesses to repay trust fund taxes over a shorter period, typically 24 months.
Long-Term Installment Agreement (LTA):
- Eligibility: For those who can’t afford the minimum monthly payment required for a Streamlined Agreement.
- Features: Allows you to pay off your debt over more than six years. Requires a detailed financial review and may involve providing extensive documentation.
Installment Agreement with Direct Debit (DDIA):
- Eligibility: You can use this option with most installment agreements.
- Features: Payments are automatically deducted from your bank account on a monthly basis, reducing the risk of missed payments.
Temporary Delay Installment Agreement:
- Eligibility: For individuals facing a temporary financial hardship.
- Features: The IRS temporarily delays collection efforts while you regain financial stability. You’ll need to provide proof of your financial hardship.
Remember that the specific terms and conditions of these agreements may change over time, and eligibility criteria can vary. It’s essential to consult the IRS website or seek professional tax advice to determine the most suitable installment agreement for your unique tax situation and needs.
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