What is an installment plan and how can it help me with my tax debt relief?

A long-term tax payment plan, also called an installment agreement, offers taxpayers who may need more than 180 days to settle their tax bill the option of paying off their tax debt in monthly installments. If you find that you can't pay your tax bill, it's in your best interest to set up a payment plan with the IRS. A payment plan can help you pay off your tax debt and avoid prosecution and possible penalties for not paying your taxes. An IRS payment plan allows you to pay your tax debt over a set period of time in manageable monthly payments.

Tax debt relief is a generic term for programs that help you pay your tax debt, such as IRS debt repayment plans and the services of third-party tax relief companies. Couples who file joint returns are responsible for the taxes they owe, but the IRS can exempt one party from taxes, interest, or penalties if the other couple was at fault for not reporting the taxes owed. If the IRS considers that your tax debt is “currently uncollectible,” the agency will temporarily suspend collection efforts, which may give you a break. By law, the IRS can impose penalties on taxpayers both for not filing a tax return and for not paying the taxes they owe before the deadline.

Tax debt relief programs help you avoid the fees you'll owe if you don't pay by the deadline. The IRS understands that not everyone can pay their taxes quickly, and one of their main concerns is collecting the taxes due. At the end of the day, tax debt relief companies often use the same IRS programs for people with financial difficulties that you can apply for yourself. Requesting relief through the IRS or working with a tax debt relief company aren't your only two options if you owe back taxes.

The help options available through the IRS usually include a payment plan or the negotiation of a debt settlement, also known as a commitment offer. If you are under an IRS tax for not paying your taxes, which means that the government garnishes your wages or confiscates your property to reimburse your taxes, you have the right to use the money from your 401 (k) plan to refund your taxes without paying a 10% early withdrawal tax. Dealing with the IRS can be stressful, so there are many tax relief companies that can help taxpayers deal with the IRS to set up payment plans and settle their tax debt. Tax debt relief is a form of assistance for people who can't pay their back taxes or taxes that weren't paid in full the year they were due.

Lorraine Cernota
Lorraine Cernota

General social media junkie. Passionate writer. Infuriatingly humble web maven. General writer. Amateur pop culture specialist.