IRS understands that, at times, you can’t pay your tax liability in whole and has made some provisions for you to make the payments in installments.
For individuals grappling with tax obligations of at most $50,000 after submitting their tax return, an option exists to engage in a structured payment arrangement with the IRS.
In scenarios where your indebtedness surpasses $50,000 but remains below $100,000, a possibility for a brief tenure agreement emerges, subject to certain stipulations:
Elevated payment installments are necessary. The IRS will require verification of your financial situation. A lien on your assets may be compulsory, impacting your credit history.
Regarding enterprises, those with tax liabilities up to $25,000, having already submitted their tax returns, are eligible to request a payment plan from the IRS. Typically, within a 30-day window post-application, the IRS will notify you regarding the acceptance or rejection of your proposal.
It is prudent to remember that prolonged delays in settling tax dues can lead to escalating penalties and accruing interest. However, the late-payment penalty is reduced by half when an installment agreement is in effect.
Your NexGen Tax Pro can help you set up the installment plan with the IRS.
You can visit the IRS website for more details.