What Is An Installment Agreement?
An installment agreement is an arrangement that is fulfilled over time by a succession of performances, such as payments, the rendering of a service, or the delivery of objects. The completion of installments by one or both parties may be specified in installment contracts. A contract might specify, for instance, that the buyer will pay a lump sum for goods that will be delivered over time, that the seller will deliver the products but will be paid over time, or that the seller will deliver the products over time and be paid after each delivery.
How Do I Request for An Installment Agreement?
The Internal Revenue Service (IRS) offers an option that enables taxpayers to pay taxes on a monthly basis by submitting Form 9465: Installment Agreement Request. But bear in mind that until you pay up, penalties and interest will continue to build up on the overdue total. The following conditions must be met for any taxpayer’s application to be approved:
- To be eligible for this arrangement, the taxpayer must have filed all prior tax returns.
- Within the previous five years, the taxpayer has not signed into an installment payment contract.
- Taxes owed by the taxpayer cannot be paid in full when they are due.
- Must be capable of paying the whole debt owed within three years.
- You do not owe more than $10,000.
Frequently Asked Questions: installment agreement
In most cases, installment agreements can be established for various types of tax debts, including income tax, payroll tax, or other outstanding tax liabilities. However, there may be specific limitations or conditions based on the jurisdiction and the type of tax debt involved.
Yes, there are typically fees and interest associated with installment agreements. The tax authority may charge a setup fee or administrative fees for processing the agreement.