Payment Plans
If you don't have the funds to settle all at once, there is a solution.
When a taxpayer qualifies to pay the IRS through a monthly Installment Agreement, the IRS will determine the taxpayer’s monthly payments based on the taxpayer’s financial ability. In most cases involving debts of $25,000 or less, the IRS will not require a prepared financial statement. If the taxpayer owes more than $25,000, a financial statement will be required to demonstrate the amount he or she is able to pay on a monthly basis. Generally, if your case is prepared and argued effectively, the IRS will agree to a maximum 60 month payment plan. The IRS also has the ability to deduct monthly payments directly from the taxpayer’s paycheck (this is known as a “Streamline Agreement”), bank account or credit card. If the taxpayer is unable to satisfy all of the debt in a 60 month installment plan, one of the three financial statements listed below can be used to expand the payment plan beyond the 60 month standard.
The Form 433-F is an abbreviated financial statement (referred to as a “Collection Statement”). It contains questions relating to the taxpayer’s lines of credit, assets such as real estate and automobiles and sources of income. Generally, the IRS takes into consideration the household income of the taxpayer (along with other sources of income such as a line of credit or the sale of an asset) and then offsets this amount by deducting expenses that are vitally necessary for the taxpayer and his or her household to live on. The remaining amount, referred to as discretionary income, is the amount the taxpayer is able to pay the IRS. This amount generally will be the required monthly payment that the IRS will seek from the taxpayer in the applicable installment agreement.
The Form 433-A is a Collection Information Statement for Wage Earners and Self-Employed Individuals. It is generally used when the debt is $50,000 or higher. The Form 433-A is an expanded version of the Form 433-F Collection Statement. It is much more detailed and, in addition to the questions on the Form 433-F concerning such matters as lines of credit, real and personal property assets and similar matters, it also asks questions relating to any lawsuits the taxpayer is party to (to determine if the taxpayer may be entitled to funds from a settlement), investments (such as retirement accounts) that can be liquidated, and other sources of income or assets that can be used to pay the IRS debt.
The Form 433-B is a Collection Information Statement for Businesses. It’s used when a business owes back taxes to determine the financial ability of the company to pay its taxes as well as its other obligations. It requests information such as employee identification numbers, the legal form of the company, how it is regarded for tax purposes (partnership, corporation, LLC), number of employees, monthly payroll and gross revenue. It requests the names of all partners, bank accounts, lines of credit, merchant account information and expected receivables. If the company is a corporation and does not have the ability to pay its back tax debt, the IRS may “pierce the corporate veil” and seek to make each corporate officer personally responsible for the debt.
No matter how much you owe, United Tax Group is able to establish a payment plan that works with your budget.
Call us at (877) 829-3703 to speak with one of our Professionals today.
