If you cannot pay your taxes in full when you file your tax return you may qualify for a Guaranteed Installment Agreement. The law requires the Internal Revenue Service to accept proposals to pay in installments if the taxpayer is an individual who:
- Owes income tax of $10,000 or less (excluding interest and penalties),
- Has timely filed and paid all taxes during the preceding five years.
- Cannot pay the tax immediately. (As a matter of policy the IRS grants guaranteed installment agreements even if a taxpayer can full pay their account immediately)
- Agree to fully pay the liability within 3 years.
- Agree to file and pay all future tax liabilities when due.
- Have not entered into an installment agreement during the preceding five years.
You can obtain your Guaranteed Installment Agreement by contacting the IRS via phone, online or by completing Form 9465-Installment Agreement Request. In order to avoid the long telephone holds many taxpayer’s opt to complete the Form 9465 and mail it to the IRS at the appropriate address listed in the instructions for Form 9465. You can obtain Form 9465-Installment Agreement request by following this link http://irs.gov/pub/irs-pdf/f9465.pdf. You can obtain the Instruction for Form 9465 by following this link http://irs.gov/pub/irs-pdf/i9465.pdf. If you can full pay your account within 120 do not file Form 9465, the IRS will grant you a 120 day extension to pay without incurring a processing fee. Presently, the IRS bases their processing fees based upon how you plan to pay them. If by check, money order, credit card or payroll deduction the fee is $120 and $52 for direct debit. The IRS will let you know that your request is approved by sending you a letter detailing the terms of your agreement and requesting the processing fee at that time. The IRS time frame for responding is usually 30 to 60 days. It is important to note that the IRS is not required to file a Federal Tax Lien on Guaranteed Installment Agreements. However, in some circumstances where a decision to file a Federal Tax Lien has been made by a Revenue Officer, the case file must document the justification in the case history including the Group Manager’s concurrence.