Installment Agreements are payment plans offered by the IRS to taxpayers who owe back taxes but cannot afford to pay their full debt upfront. This program allows taxpayers to break their debt into manageable monthly payments, enabling them to catch up without immediate financial strain. While this can be a lifesaver for many, it’s important to understand the details before entering into an agreement.
Who Qualifies for Installment Agreements?
To qualify for an Installment Agreement with the IRS, the first requirement is that you must be up-to-date with all your tax returns. If you have unfiled returns, they will need to be filed before your application can be processed. Once you’re current, eligibility largely depends on the amount owed and your ability to provide necessary documentation.
Transparency is Key: Understanding the Terms
While Installment Agreements provide breathing room, they come with some critical caveats:
- Interest and Penalties: The IRS charges compound daily interest on the balance owed, based on an annual rate. This means your total debt will grow over time until fully paid.
- No Discounts: It’s essential to note that an Installment Agreement is not a form of debt forgiveness or discount. It is simply a mechanism to help taxpayers manage their obligations while remaining in compliance with the law.
Types of Installment Agreements
The IRS offers different types of Installment Agreements, depending on how much you owe:
- For Balances Under $25,000:
- If you owe less than $25,000, approval is typically automatic as long as your returns are up to date. This is the simplest form of an Installment Agreement.
- For Balances Between $25,000 and $50,000:
- Taxpayers in this range may need to provide additional paperwork to demonstrate financial hardship. This type of agreement is often referred to as a “Streamlined Installment Agreement.”
- For Balances Between $50,000 and $250,000:
- Approval requires documentation to prove you cannot pay the balance in full. This process may involve submitting Form 433-A or 433-F, financial disclosure forms that help the IRS assess your financial situation.
- For Balances Over $250,000:
- Agreements for these amounts require even more detailed evidence and documentation. The IRS will scrutinize your finances closely before approving a payment plan.
Why Blueprint Finance?
At Blueprint Finance, we prioritize trust and transparency. Unlike some companies that thrive on keeping you in the dark or count on your lack of knowledge to sell you unnecessary services, we want you to be fully informed. Knowledge is power, and we’re committed to empowering you with the information you need to make the best decisions for your situation.
Here’s what sets us apart:
- Expertise That Matters:
As federally licensed Enrolled Agents, we are licensed by the Department of Treasury and undergo yearly training to stay ahead of changing tax laws and policies. This means you’re not just hiring a tax resolution company—you’re hiring proven experts with thousands of resolved cases behind them. - Full-Service Handling:
From filing the paperwork to communicating with the IRS on your behalf, we handle every aspect of your case. You can focus on your life while we focus on resolving your tax challenges. - A Bigger Picture Approach:
Finance isn’t just about tax resolution for us. Our expertise spans across the financial spectrum, enabling us to provide holistic solutions tailored to your unique situation.
Let’s Resolve Your Tax Debt Together
If you’re overwhelmed by tax debt and unsure where to start, let Blueprint Finance guide you. Unlike competitors who may count on your confusion, we’re here to make sure you’re informed and confident about your options.
Reach out today to learn how we can help!
