IRS Payment Plans


    If you owe the IRS a debt that you cannot pay in a lump sum, you might be able to negotiate a long-term IRS payment plan to pay off the tax debt in monthly installments. There are some important IRS rules for you to understand before submitting any information to the federal taxing authorities.

    Full Financial Disclosure Required

    In order to obtain an installment payment plan you will be required to provide to the IRS detailed financial information signed under penalties of perjury. The IRS requires this information in order to determine the appropriate amount of your monthly payment.

    Criminal Penalties for Filing False Financial Statements

    Never provide a financial statement to the IRS unless you are 100% certain it is accurate.
    We have seen many taxpayers turn a civil, debt collection matter into a criminal investigation by filing a false financial statement with the IRS.

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    The IRS Allows Only “Necessary” Living Expenses

    Tax forms

    The IRS has guidelines for the amount of living expenses a taxpayer will be allowed to consider when requesting an Installment Agreement. The guidelines allow specified maximums of housing costs, food and clothing costs and transportation costs based on the number of people in the taxpayer’s household and the region of the U.S. in which the taxpayer resides. Often, the guideline amounts are less than the actual expenditures made by the taxpayer for the specified category. This is especially true in the area of housing costs.

    IRS Financial Statement Forms are Complex: Seek Qualified Tax Counsel Before Filing

    Because of the discrepancy between the IRS’ living expense guidelines and what taxpayers are actually obligated to pay, it is important that a taxpayer wishing to get the best Installment Agreement terms from the IRS engage the assistance of a qualified tax CPA, Attorney or IRS Enrolled Agent before submitting any financial data to an IRS agent.

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