When it comes to tax payment plans there are many types to be aware of. In other words not every tax payment plan is the same. The one that you use to pay your debt may be completely different from the next person. Of course, you have to know more than this. You must also have knowledge of what each tax payment plan offers, the pros and cons, what you are eligible for, and how to get started. As you can see, there is nothing overly simple about getting started with a payment plan.
The are three types of tax payment plans or Installment Agreements which include: guaranteed installment agreement, streamlined installment agreement, and a financially verified installment agreement. While you may think that you have the ability to use any plan that you want, this is not exactly the case. The IRS has a lot to say about which tax payment plan you get involved with. Yes, you have to move forward to tell them that you need a payment plan to pay what you owe. But from there they will take over and give you a better idea of what you are eligible for. As you can imagine, the tax payment plan for $10k of debt is much different than one for $100k.
Take for instance somebody with $10k in debt or less. In this case you will be given a guaranteed installment agreement as long as you have filed all past returns and have never been in trouble with the IRS. To go along with this, you should know that you only have 36 months to pay your debt. This is in stark contrast to debt of $100k or more which is more difficult, requires finanical disclosure through a Collection Information Statement which often requires professional help. It does not take a genius to see that this situation is much more complex and dire than one that includes a smaller amount of debt.
If you owe money to the IRS you need to know the most common forms of tax payment plans. This way you have an idea of which one you will be signing up for, as well as what it means to you. (Manuel Javis Jr.)
