For individuals dealing with an IRS debt, the process can be painful and extremely stressful. Among other things, individuals are often worried about the debts they will ultimately incur and the lengths they will need to go to in order to come to a workable agreement with the IRS. If required to file a collection information statement, also referred to as a Form 433A, the process often become more stressful for individuals who are self-employed. The main reason for the added difficulty is that the earnings of self-employed individuals may come from multiple sources and will not be neatly laid out on an employer-generated W-2 form. If you are thinking about requesting an installment plan with the IRS, you should be ready to start filling out the required forms.
Requesting a Partial Payment Installment Agreement
If you believe that you need an partial payment installment agreement in order to pay your tax debt, you will need to start the process with Form 433-A – the Partial Payment Installment Agreement Request form from the IRS. Form 433-A can be used when filing a current return for which the taxpayer owes money and cannot afford to pay the full amount, or in response to an IRS tax bill. A letter outlining your request and three months of backup data for income stated on Form 433-A should be included when submitting the partial payment installment agreement form to the IRS.The information required on the installment request includes:
- general demographic information (name/address/etc.)
- the amount of debt owed to the IRS
- the amount you believe you can pay towards your debt on a monthly basis
Form 9465 also provides a space for taxpayers to enter banking information if they want the IRS to debit their bank accounts on a monthly basis for the agreed upon installment amount. The option can be good for individuals who may forget to pay their installment every month because the event of a missed payment causes default and the entire agreement can be terminated.
Approvals of Installment Requests
In a taxpayer says that they can pay their entire debt within 120 days on the notice date, a request for an installment agreement is not necessary (and a Form 9465 should not be used). However, if payment in full cannot be made within 120 days, the request should be sent to the IRS with all required information. It is critical to the approval process that ALL information be truthful and honest to the best of your knowledge. Any fraud or dishonesty will seriously hurt the chances or your request being approved.
Help from a Tax Attorney
To discuss your options and the choices available, you should contact an attorney who specializes in dealing with the IRS. There are many ways to address tax problems, and the faster an agreement is reached, the faster you can pay your debt and move forward without drowning in interest charges. An experience lawyer is your best ally when dealing with the IRS in tax disputes.
