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The definition of an Installment Agreement is just a payment plan to payoff your tax debt over a period of time. An installment agreement must meet certain criteria regarding the schedule of payments and the amount of the payment. As with any IRS settlement, the taxpayer must be compliant with tax return filings before an installment agreement can be established. This is required because the amount owed must be defined in full; including taxes owed, interest accumulated, and penalties accrued.
Once an amount is defined, the IRS in most cases will want to obtain a financial statement from the taxpayer. This financial statement is a simple income versus expenses and what is left over is to be paid to the IRS to settle the delinquent tax debt.
Here inlays the problem. You have real expenses, and you make real payments toward those expenses. The IRS does not go by your real expenses they use what is known as the National Standard Expenses. The National Standard Expenses are what the IRS uses to determine if your expenses are reasonable for the area you live in. If your expenses are higher than the National Standard Expenses, they will use the NSE dollar amount not your actual expense. This can make the amount of the installment agreement unattainable for taxpayer causing the taxpayer to default on the installment agreement.
Once taxpayer defaults on the installment agreement, the IRS will begin more aggressive collection activities against the taxpayer; such as bank levy, wage garnishment, and even levy of real and personal property. The object of negotiating an installment agreement is to attain an affordable payment that is reasonable for the taxpayer and will allow the IRS to collect the delinquent tax owed.
Certified Tax Group will file any delinquent tax returns, determine the actual amount owed by eliminating any erroneous charges the IRS may want to impose, and negotiate an installment agreement that will meet your budget without putting undue burden on you.
Don't delay and call today, as interest and penalties accrue daily!
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