Orange County Installment Agreements & IRS Payment Plans

Are you facing an overwhelming demand to pay delinquent Back Taxes?

An IRS Installment Agreements may be your best option.

If you don’t qualify for the IRS Offer In Compromise program – and very few people do, an IRS Installment Agreement (an IRS Payment Plan) may be the best way to resolve your problem. Even if you are using it as a temporary measure to put a halt to collection efforts as you seek out “cheap money” to pay off your entire tax debt. Setting up an IRS payment plan immediately STOPS all IRS collection mail and phone calls – ALL COLLECTION ACTIVITY IS CEASED – and gives you a time to pay off your tax debts while simultaneously eliminating the stress and anxiety of the next unknown shoe to drop.

Try to Borrow Low-Cost Money to Pay Off your Tax Debt

If there is any way for you to borrow the money to pay your tax debt – from family, a bank, a HELOC (home equity line of credit), or even a credit card that offers 12-months of ZERO INTEREST (be very careful as if you don’t pay the credit card off on time all interest and late charges are retroactive to day one). ANY of these alternatives could be a better, less costly, alternative than agreeing to a long, drawn-out, (and expensive) IRS Installment agreement.

EXPENSIVE? – Unfortunately, penalties and interest continue – to be charged on your outstanding balance as you attempt to pay the debt off. You are required by law to pay the interest on your tax debt.

There is some good news – in that there is a chance we can petition the IRS to get some or all of your tax penalties waived.

What are IRS Installment Agreements ?

IRS Installment Agreements - IRS Installment Pament PlansIRS Installment Agreements (a simple payment plan) allows a taxpayer to pay delinquent tax liabilities over time. For many taxpayers who have back taxes or an insurmountable tax liability, paying what is owed all at once just isn’t possible. Establishing an IRS Installment Payment Agreement can make paying a tax liability a little more manageable. But you need to be warned! Depending on how much you owe, paying off tax debt using the IRS Installment Agreement is like paying off a $5,000 credit Card balance at 18% interest by making the “minimum possible monthly payment.” It can be unending! Of course the letters and phone calls will stop – but at what price?

IRS Collection Activities Cease Once an Installment Plan is Accepted

As soon as an IRS Installment Agreement is submitted (or phoned in) and accepted, the IRS will cease from ALL collection activities against the taxpayer. As long as the taxpayer remains current with all payment obligations and any future tax filings, the IRS will also cease the levy of bank accounts and wage garnishments.

Important Considerations Regarding IRS Installment Agreements

If you are contemplating entering into an IRS Installment Agreement, there are some facts that you need to consider:

  • There is a $105 IRS set up fee to for an IRS Installment Agreement.
  • Interest and penalties continue to accrue on the outstanding balance of the tax liability until the liability is paid in full.
  • If the taxpayer has some sources to borrow funds, that might make for a significant savings. A second mortgage or HELOC might be a simple alternative and any second mortgage interest will be tax deductible.
  • Interest and penalties charged by the IRS are not tax deductible.
  • The IRS may file a federal tax lien to pressure the taxpayer’s compliance with the installment agreement. However, the IRS cannot execute upon the tax lien and levy upon any personal or real property you own so long as the IRS Installment Agreement is being reviewed, is actually in effect, or for 30-days after denial of the Installment Agreement. Moreover, if a lien was filed, the IRS would not proceed with levy if you were denied an agreement and then begun the IRS appeal process.

Tax Professionals can almost always negotiate better arrangements

An experienced accountant or tax professional can help negotiate an IRS Installment Agreement with more workable payments than most taxpayers will be offered without professional representation. Most taxpayers applying on their own will find that the IRS will “demand” that you accept its calculated payment plan – if they agree to installments at all. This is because the IRS desires to collect the full tax debt as rapidly as possible. Generally speaking, the IRS’s calculations for a payment plan are often unrealistic, leaving the taxpayer with little or no disposable income should the taxpayer accept their often too-aggressive plan.

Requirements to Submit an IRS Installment Agreement

The IRS requires that a taxpayer file all delinquent Income Tax Returns before or submitted concurrently with the application for an IRS Installment Payment Plan. To remain in compliance, the taxpayer is required to remain current on future tax return filings. Don’t freak out if you have outstanding tax returns. That’s what I do! I am Eugene Palovik, and I am able to quickly and affordably prepare and file any unfiled, back tax returns necessary to bring current and consequently into compliance. Once your returns are submitted, you are able and encouraged to submit an IRS installment agreement petition.

Out of work, Illness? We can petition the IRS to classify you as “Currently Not Collectible”

If your circumstances are such that you are not able to take advantage of an IRS Installment Agreement, or your do not have sufficient resources to make an Offer In Compromise where a significant percentage of the tax debt is often forgiven, in some instances we might be able to assist you in requesting that the IRS place your account in a “currently not collectible” status. If your circumstance are conveyed to the IRS whereby they are agreeable to classify the taxpayer as “currently not collectible,” the IRS will discontinue enforcement action and release any levies already in place. For more information concerning state or IRS installment agreements, Offers In Compromise, or Currently Not Collectible, please call me. (714) 863-7857

Palovik Financial Services

Eugene Palovik
Palovik Financial Services
P.O. BOX 206
Buena Park, CA 90621

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(714) 863-7857 – Office

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