If you owe the IRS and you can’t possibly afford to pay it all back in one lump sum, it may be possible to work out a structured payment solution. Another word for this payment plan is an installment agreement. There are three types of installment agreement plans. The first is a streamlined plan and is for tax liabilities under $25,000. There is also something called a complex installment agreement. The third is called a partial-pay installment agreement.
Installment plans are based on each person’s circumstances. Those who are granted extra time to pay their debt in full in 60 or 120 days will generally pay less in penalties and interest than through an installment agreement. The installment agreement, however, is a helpful option that can help people repay their debt. Whether you own a business or you’re just a person who’s underwater, there are special forms and considerations that you’ll need to be aware of.
The best thing to do is consult with a qualified tax attorney. The IRS is simply too complex for the average person to navigate. There are some tax situations that call for outside help. It’s not an easy thing to bare when the IRS is pounding on your front door and demanding that you pay taxes owed.