IRS Collection Division

Installment Agreements

An installment agreement is a payment arrangement whereby the IRS allows a taxpayer to pay their tax debt over a period of time by way of a monthly payment. When a payment plan is established, the IRS will not take any further collection action, such as wage garnishment or seizure of bank accounts.

The taxpayer must be current with all past tax returns before beginning an installment agreement. Penalties and interest do continue to accrue until the full balance is paid, however. Also, a tax lien may be filed as part of the terms of the installment agreement, depending on the amount of the total tax debt. To find out more about this option to pay your IRS tax debt, contact the tax attorneys at JEFFREY BURR today.

It often occurs when a taxpayer attempts to establish an installment agreement on their own, that the IRS wants to collect the taxes as fast as they can. In many cases, the unrepresented taxpayer finds themselves in an installment agreement that is too burdensome. This, in turn, often leads to a default of the installment agreement and the beginning again of the collection machine. Therefore, it is critical to have an affordable agreement established properly from the very beginning.

If you cannot afford to make monthly payments and do not qualify for any other type of relief, such as an Offer in Compromise, we may negotiate to have your account placed in a Currently Not Collectible (CNC) status. Under CNC status, you will not have to make any payments and there will not be any type of collection action unless there is a material change in your financial circumstances.

Get the help you need with an installment agreement by contacting a Nevada tax attorney at JEFFREY BURR.

Penalty Abatement

If you fail to pay your back taxes, it can result in IRS penalties and interest that can compound over years and make your tax debt substantially larger than it initially was. Non-payment of this debt can then result in even more IRS penalties and interest, a levy on your wages or bank account, a lien against your property, or even a seizure of your assets. IRS Penalties can be applied for filing your tax return late or for paying your due tax late.

The IRS penalty for filing late is generally 5% each month, or partial month, and can be up to 25% of the amount due on your tax return. There are some situations and circumstances in which you can have your IRS penalties abated or eradicated either partially or in full for one tax year or multiple tax years. To submit this Penalty Abatement request to the IRS, a taxpayer must have reasonable cause that is specific for each year and must be able to explain why the penalties should be removed.

Besides an Offer in Compromise, the IRS offers an alternative program for reducing delinquent tax debt. Clients seeking tax relief from their tax liability can still be helped. The tax attorneys at JEFFREY BURR can work with you and make payment arrangements that the IRS will allow. If there were circumstances beyond your control that prevented you from paying your tax debt and led to delinquency, we are able to challenge the penalties (Penalty Abatement) that have built up by preparing and filing a Form 843 Penalty Abatement Request.

Relief from penalties falls into four separate categories:

  • Reasonable Cause – mistake made by the taxpayer, ignorance of law, death, serious illness, unavoidable absence or divorce.
  • Statutory Exceptions – simple or complex legislative tax code changes.
  • Administrative Waivers – undue hardship, fire, flood, natural disaster, bad legal/tax advice, and first-time waiver.
  • Correction of Service Error – mistakes made by the IRS.

If an Offer in Compromise is not the best solution in resolving your tax debt, a Penalty Abatement may be a possible alternative.