September 22, 2020

Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.

Dealing with the IRS can be a stressful ordeal, especially if you owe a tax liability. When attempting to set up an installment agreement with the IRS, it can take anywhere from a few hours to a few months depending on the type of agreement you’re attempting to qualify for. 

The IRS allows taxpayers to set up payment plans, such as extensions to pay and “streamlined” installment agreements. For more complicated agreements, the IRS will require that you provide financial information in order to verify whether or not you qualify.

Here are your options when attempting to get on a payment agreement with the IRS:

Request an extension. If you need more time to pay off your tax liability, the IRS allows taxpayers to request an extension for up to 120 days. The IRS will grant this extension for any tax balance amount as long as taxpayers pay their balance owed before the deadline. If the bill is not reconciled before the due date, the IRS will place the taxpayer in question back into collections. 

Set up a simple payment plan. These agreements are typically called streamline installment agreements and can be set up by a taxpayer that has a tax bill of up to $50,000. Taxpayers must pay their balance back within six years and generally the IRS does not file a tax lien. 

If you were previously set up on an agreement and defaulted, you may need to contact the IRS to set up another one and provide your current financial information.

Taxpayers that owe between $25,000 and $50,000 will be required to pay by direct debit or a payroll deduction in order to avoid a lien being filed against them. The typical time frame to set up this agreement is between 4-6 weeks.

Request a payment plan for a tax bill over $100,000 OR currently not collectible status. For those who have a tax balance over $100,000 or you’re financially strapped and unable to pay back the IRS within an 84 month period, the IRS does provide assistance. A taxpayer can request a currently not collectable status if they are in financial hardship and don’t have the ability to pay their tax liability. 

A taxpayer must submit their financials and prove that they are in a hardship in order to qualify for this agreement. The IRS typically files a tax lien for those who owe more than $10,000.

The agreement can be requested over the phone however, it can take months to complete. This is because the IRS requires a taxpayer’s most current financials as well as additional detailed information. If this agreement is requested via mail, it will typically take the IRS 1-2 months to consider your request and could even ask that a taxpayer forward more information if they deem the documentation they have on file is insufficient. 

If you need tax help, contact us for a free consultation.