IRS Tax Relief Agreement

IRS Tax Relief Agreement

An IRS tax relief agreement permits the taxpayer to pay his full federal tax debt in installments.  Tax relief agreements generally require equal monthly payments. The amount and number of  installment payments depend on the amount of federal tax debts. The IRS also considers your ability to pay.  However, an installment agreement is more costly than immediately paying all your unpaid federal income tax debts. The IRS charges interest and penalties on the unpaid portion of the federal tax debt.

IRS tax relief

In addition, the IRS charges a setup fee for installment agreements. If you owe the IRS more than $25,000, the IRS may also ask for financial information to determine your ability to pay. Even if you set up an installment agreement, the IRS may still file a Notice of Federal Tax Lien to secure the government’s interest until you make your final payment. However, the IRS can’t take any collection actions affecting your property while the IRS considers a taxpayer’s request for an installment agreement, while the installment agreement is in effect, for 30 days after the IRS rejects your request for an installment agreement, or for any period while the taxpayer appeals the rejection.

IRS Tax Relief Agreement Fees

The IRS raised its fees for installment agreements and offers in compromise. Effective January 1, 2014, the Internal Revenue Service increased the processing fees for standard installment agreements from $105 to $120 and doubt as to collectability offers in compromise from $150 to $186.  The fees for a direct debit installment agreement remains unchanged at $52.

If you have federal income tax debts and need IRS tax relief, contact Chicago CPA and attorney Brian J. Thompson.