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Am I Eligible For A Payment Plan?


Taxpayers who are unable to pay what they owe to the IRS in a single payment, often have the option of applying for a payment plan, which allows taxpayers to pay off their balance over time. Which of these payment options is available to a taxpayer will depend on his or her specific situation, including how much is owed and whether he or she is applying as an individual or a business. For help determining whether you qualify for a payment plan, please call our dedicated Florida IRS installment agreement attorneys today.

Eligibility Criteria

The two most common types of payment plans are the short-term payment plan, which requires fulfillment of a debt to the IRS within 120 days, and the installment agreement, which involves making monthly payments over a longer period of time. The eligibility criteria for applying for a payment plan will depend largely on the type of plan in question. A taxpayer could, for instance, qualify for a short-term plan if he or she owes less than $100,000 in combined taxes, penalties, and interest. Installment agreements, on the other hand, are available to those who owe $50,000 or less in taxes and fees. In fact, taxpayers are guaranteed an installment agreement if they owe no more than $10,000, haven’t filed a late return in the previous five years, don’t have an open bankruptcy proceeding, and agree to repay their debt within three years.

Payment Plan-Related Costs

It’s important to note that there are often fees that come along with payment plans. Those who apply for short-term payment plans, for instance, while not required to pay a setup fee, will need to pay off any penalties and interest that accrues until the balance is paid in full. Installment agreements, on the other hand, come with a setup fee, as well as penalties and interest. The amount of this fee, however, will depend on whether the monthly payment is automatically withdrawn or is not paid via direct debit.

Reviewing a Payment Plan

Taxpayers are allowed to make certain changes to their existing payment plans, including:

  • Modifying the monthly payment amount or due date;
  • Converting an existing payment plan to a Direct Debit agreement;
  • Changing their bank routing and account numbers; and
  • Reinstating their agreement after default.

There are, however, requirements with which taxpayers must comply when making some of these changes. For instance, taxpayers who are attempting to change their monthly payment amount will need to make sure that the new amount satisfies the necessary requirements, which includes meeting a minimum threshold. Further, while it is possible to reinstate a payment plan that has lapsed through default, taxpayers should be aware that doing so comes with a reinstatement fee.

Schedule a One-on-One Consultation Today

If you are unable to pay the IRS what you owe, don’t panic. You do have options, so if you are concerned about your own eligibility for an IRS payment plan, please call 386-490-9949 to set up a free meeting with experienced IRS installment agreement lawyer Ronald Cutler, P.A. today.