As a general rule, multiply the debt by .08 and divide by 12. If this amount is beyond your capacity to pay on a monthly basis the potential for hardship status and offer in compromise relief may exist.

It is vital, that you consider your month to month expenses and current tax obligations before determining an amount to budget toward back tax debt because State and IRS payment plans require that you timely file and pay your current taxes during the life of the installment agreement and those that do not pay their current tax obligation often fine themselves in the midst of a revolving door when the goal is to get IRS and State tax authorities off your back, once and for all.

IRS Administrative fees to initially set-up a payment agreements range from 43.00 - 105.00, depending on your financial situation and method of payment.

If you make an arrangement that extends beyond the statute of limitations for collection (10 years from date of assessment) you will be required to sign an agreement extending the statute of limitations.

Always negotiate minimum installment payments because, you can always decide to pay more. Failure to perform as agreed has the potential to void an existing arrangement and either reactivation or restructuring your agreement will require that you pay a $45.00 IRS imposed administrative fee.

The interest rate on your credit card may be lower than the penalties and interest imposed by the Internal Revenue Code and IRS and State liabilities can be paid over time by structuring withholdings from payroll checks and using planned refunds as yearly contributions to settle the debt.

Example: Husband and Wife both work, are paid weekly and each request an additional $20.00 withholding your debt will be reduced by $2,080.00 a year.

The IRS generally files a Notice of Federal Tax Lien to secure an interest in property while installment agreements are in effect. But, levies against wages, personal and real property will generally not occur, while:

An installment agreement or offer in compromise application is considered,
Any installment plans are in effect,
For 30 days after a request for an agreement has been rejected, and
After, The Date of Petition for bankruptcy
While legal tax proceedings are pending, and
For any period while a timely appeal of the rejection or termination is being evaluated by the IRS

Often, individuals find themselves in a predicament where they have not filed back tax returns and are confronted with impending wage garnishments and forced to enter into an installment payment agreement. You typically have 30 days before you are required to make your first payment and you should take immediate action to file any back tax returns because you may eliminate the debt all together or reduce the amount you are required to pay each month.

If you contact the IRS, to set up an installment agreement you should be prepared to discuss your income, expense, asset and liability information, in detail. To prepare, gather together all of your information about your income, assets and necessary living expenses.

Before you enter into any installment payment agreements you should make contact with a tax professional to discuss your situation because: the statute of limitations for collections may have expired, the potential exists that filing back tax returns may reduce or eliminate the debt and you may be eligible for offer in compromise, hardship status or bankruptcy relief.

Our service fees are always known in advance, all inclusive, structured to economically resolve your tax problem and we literally dare you to compare our services and fees, with those of our competitors. If you have questions about payment plans we offer obligation free answers, you can rely on.

Our privacy and security policies guarantee that contact will not result in future unsolicited sales calls or correspondence in any form and "only" contact initiated by you or required to provide our tax services will occur at any time.

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