On behalf of Silver Tax Group posted in Back Taxes on Wednesday, October 19, 2016.
The Internal Revenue Service sometimes allows for payment of taxes through installment agreements. Such agreements allow for you to spread your payments out. The agency recently announced it was testing a process for streamlining installment agreement requests, and this may prove helpful to taxpayers owing back taxes. Taxpayers will still need to meet certain conditions to qualify, however.
In the IRS announcement, the agency states it is testing this new process through September 30, 2017. The criterion specifically mentions “taxpayers with an assessed balance of tax, penalty and interest between $50,000 and $100,000.” The IRS plans to provide additional information regarding qualifications during the coming weeks.
Depending on results, such streamlined criteria could become permanent. The current IRS code allows for the IRS to enter into written installment payment agreements with taxpayers. There are streamlined processes already in place which allow for quick processing of installment agreements without managerial approval or financial analysis. The maximum number of months allowed under current installment agreement rules is 72 months. Under the new IRS announcement, the IRS will be testing whether an 84-month period will prove effective.
What should taxpayers do
When it comes to paying back taxes, it is clear that a failure to respond will not make the problem go away. The penalties for not paying taxes or for even failing to file the proper forms can be enormous. But while the IRS provides taxpayers options concerning ways to pay taxes, taxpayers may be unaware that options exist. Taxpayers also have understandable concerns as to whether such options will prove beneficial. Therefore, having legal representation who will provide objective advice regarding payment of back taxes can be helpful.