Tax Payment Plans—Do You Qualify?

Gainesville FL — Do you qualify for an ‘automatic’ IRS tax payment plan? If you do, you can file it online yourself at without speaking to an IRS agent — or disclosing anything about your finances!  You’ll authorize the IRS to automatically withdraw a fixed amount every month from your bank, until the text debt is paid off. This page tells you who qualifies for an IRS Tax Payment Plan.  If you don’t qualify right away, or have questions, you may need a bit of help. In Gainesville FL call 352-317-5692 for a free consult on your tax debt situation. While IRS payment plans offer heartfelt relief —  you may also want to explore an Offer-In-Compromise — settling your tax debt with the IRS for less money than you owe.

Do You Qualify for Tax Payment Plan Relief?

The requirements for IRS tax payment plans are tough. But if you do qualify, a payment plan is a wonderful deadline reprieve — lasting stress relief! Depending on how much you owe and other factors, you may have three, six, or even seven years to get square.

IRS Tax Payment Plans – Requirements

Here are the four requirements to set up an IRS tax payment plan.

  1. You must be in compliance with all previous tax returns you have filed.
  2. You must have made your estimated tax payments for the current year.
  3. You must not have been past due on any tax bills over the last five years.
  4. You must not have used a payment plan in the previous five years.*

Basic Tax Payment Plan > 36 Months

You must owe less than $10,000, and be able to pay it completely with up to 36 monthly payments. For example, If your debt was $1o,000,  you could agree to pay $278 a month for three years to get square.

 Streamlined Tax Payment Plan >  72 Months

  • Individuals and out-of-business sole proprietors who owe less than $50,000
  • All other taxpayers who owe less than $25,000
  • Up to 72 months to pay it off

 Expanded Payment Plan > 84 Months

  • Individuals and Out-of-Business Sole Proprietors who owe less than $100,000
  • Up to 84 equal monthly payments to clear the debt

Caveat: Don’t Mess Up!  However…

There’s ‘gotchas’ with IRS payment plans – If you:

  • Miss any payments
  • Fail to file any tax return on time (extensions are OK)
  •  Fail to make any current year tax payments

— the payment plan is automatically null and void.

— At least, that’s the policy.

* However, I’ve seen anecdotal evidence that the IRS can be more lenient. For example, I know of cases where the IRS let people add new tax debt to an existing payment plan, contrary to statement #4 above.

My take:  if the payment plan money is flowing in, and has a history of doing so, why turn off the spigot? Thus you have a threat ( the policy) and a more lenient practice (apparently) when the payments are flowing.

I’m Jim Payne, your tax representative. I look after your interests. I look forward to serving you, saving you money, and releasing you from much of the stress and anxiety of dealing with the IRS. Please call 352-317-5692 or email me for your free phone consult.