An IRS non-streamlined installment agreement is available to taxpayers who owe $50,000 or more and have the means to afford a monthly payment. However, if a taxpayer cannot afford to pay 100% of their tax debt, they should consider other options. This article outlines the requirements and benefits of this alternative to the traditional IRS installment plan. You can apply for non-streamlined installment agreements by submitting a financial statement with information on your debts, expenses, assets, accounts, etc. To qualify, a taxpayer must owe no more than $50,000 in tax debt.
Taxpayers who owe $50,000 or more
A non-streamlined installment arrangement (also called a Financially Verified Installment Agreement, or FVIA) is a legal arrangement between the IRS and a taxpayer who owes more than $50,000 but less than $100,000. The benefits of this agreement over an FVIA include the fact that it is not an automatic payment, and repayment terms are not predetermined. However, if the taxpayer fails to pay their debt by the agreed-upon date, the IRS will probably file a lien on the taxpayer’s property to enforce their claim.
If you owe more than $50,000, a non-streamlined installment agreement could be the best choice. However, it is best to speak with a professional to determine your best option. The IRS has recently made installment plan options more favorable for taxpayers, but collectors still have considerable discretion when determining how much to collect. Besides, you never know how long this non-streamlined installment option will remain in effect. An experienced tax attorney can negotiate an installment agreement that will work best for your particular situation.
The IRS will generally take several months to evaluate a proposed payment plan. If the IRS thinks some of the taxpayer’s living expenses are unnecessary, if false information were given, or if the taxpayer has not completed a preceding installment arrangement, it may refuse a proposed agreement.
In a non-streamlined installment plan, your financial information and living expenses will be analyzed quarterly. You can choose to pay a lower amount in the first year of the agreement and raise the payment amount over the course of six years. If you have a low income and living expenses, you may be able to use a regular installment plan. In this case, the IRS will not collect the full amount because the installment plan was designed to take into account your living expenses, including your car payment.
If you owe less than $50,000, you may be eligible for a streamlined installment agreement and payment plan. You must be able to pay off your debt in 72 months or less. You also need to have filed all of your income tax returns in the last five years.
An alternative to non-streamlined agreements
If you have been receiving tax bills but are unable to make the payments, you might want to consider filing an Offer in Compromise. This option is also available to taxpayers on installment agreements that have partial payments. In addition, if your financial situation has changed, you may be eligible to settle the balance and apply for an installment agreement without a financial statement. It can be a stressful and unpleasant situation to receive a massive tax bill. You should contact a tax attorney to learn more about all of your alternatives.
