IRS Issues: Facts About Installment Agreements

With the help of an experienced tax attorney, you can enter into an agreement with the IRS to pay your tax debt on an installment basis to finally settle your back taxes. Your total balance will be divided over a certain number of months, so you can gradually wipe out the entire debt. Interests will still be accrued every month, but the total monthly payment should be within your financial capabilities.

Reasons for Rejection

The IRS will only accept your proposal for an installment agreement if you meet their set criteria. Here are some of the reasons why your offer may be refused:

  • You deduct too much for your allowable living expenses. Note that you will outline how much you can spare from your income after taking out your essential daily expenses. If the IRS thinks that some of the items are too lavish or luxurious, they may not accept the deal.
  • You gave incomplete or inaccurate information about your assets or income sources.
  • You have a history of defaulting previous installment agreements.

The IRS can also revoke the installment agreement later on if you default on payments or if you commit other disqualifying circumstances (e.g. not filing a tax return and missing tax payments).

Tax Lawyer Help is Vital

Make sure you talk to a reputable tax lawyer in San Diego before entering an installment agreement, so you can avoid wasting your resources or ending up with a revoked agreement with a poorly executed proposal.


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