The Internal Revenue Service (IRS) encourages taxpayers to pay off their back tax liability all at once, but for those who feel it is too financially burdensome can use an installment agreement plan. It is an agreement you make directly with the agency to pay your federal tax bill over a certain amount of time. There are 3 kinds of IRS payment plans we help with at My Tax Settlement:


Fresh Start Installment Agreement Plan

To qualify for what the IRS calls the “guaranteed” installment agreement plan, the taxpayer must be live up to the following requirements:

  • The taxpayer should owe less than 10,000 USD. This sum does not include the interests on the tax and the penalties for late tax payments.
  • The taxpayer cannot pay the tax liability within the due date.
  • The taxpayer has been making regular payments
  • cannot pay the tax immediately;
  • agree to fully pay the tax liability within 3 years;
  • agree to file and pay all tax returns during the term of the agreement; and
  • have not entered into an installment agreement during any of the preceding five taxable years.

If you meet the criteria outlined, the IRS typically doesn’t file a federal tax lien.

However, if it is the case that you do not qualify for the guaranteed installment agreement because you cannot your tax balance within 3 years, you may still qualify for a streamlined installment agreement and avoid a federal tax lien filing.


Streamlined Installment Agreement Plan

For the most part, the qualification requirements for this plan are quite similar to the guaranteed installment plan, but there are a few additional requirements. Eligibility requirements for this tax payment plan are:

  • The taxpayer should not owe more than 50,000 USD in tax payments. This sum includes the interest and penalties on the owed amount.
  • The total owed sum should be paid by the taxpayer within 6 years (i.e., 72 months)
  • The monthly payment agreed by the taxpayer should at least be equal to the minimum acceptable payment.

In this plan, the taxpayer is bound to pay a set-up fee for the plan. If you are a part of any previous tax payment plan and want to restructure the plan, you will have  to pay a fee (which varies from taxpayer to taxpayer).


Non-Streamlined Installment Agreement Plan

If the taxpayer owes more than 50,000 USD and can pay installments, they can enter into the plan. The installment payment is not set by the IRS in this case. But the taxpayer has to negotiate the amount they will be paying. Later, you will provide your financial information to the IRS with Form 433-F. This will report your assets and living expenses.


When will the contract be terminated?

The contract will be valid as long as the taxpayer pays the agreed-upon installments regularly. Missing a payment can be a reason for the IRS to terminate the contract. The contract can also be terminated in case the financial condition of the taxpayer changes.


If you’re a candidate for any of these installment plans, please get start your free evaluation here.