Installment Agreements
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The Tax Practice of IIT Chicago-Kent College of Law
The Tax Practice of IIT Chicago-Kent College of Law

312-906-5041

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Chicago Tax Attorneys for Installment Agreements

chicago tax installment agreement lawyer

Installment Agreements for IRS Tax Repayment

Most taxpayers that don't qualify for an Offer in Compromise have no choice but to enter into some type of installment arrangement for paying off some or all of their taxes due. While there may be some other options available, installment agreements typically offer taxpayers the quickest way to resolve their IRS problem and get on with their lives.

The IRS actually has four different types of installment agreements:

  1. Guaranteed installment agreements. If you owe less than $10,000 and can fully pay the balance in 36 months or less, Congress has statutorily provided that you are entitled to an installment arrangement (Internal Revenue Code section 6159(c)). This is basically automatic, and you certainly don't need a lawyer or accountant to do this for you. Just go to the IRS website and complete the submission online: https://www.irs.gov/individuals/online-payment-agreement-application
  2. Streamlined installment agreements. The IRS has, by internal policy, actually improved on Congress' guaranteed arrangement by expanding the maximum balance to $50,000, and the payoff period to 60 months (72 months if you are willing to have the monthly payments electronically-debited from your bank account). As with the statutorily-provided guaranteed arrangement, you can do this yourself, online: https://www.irs.gov/individuals/online-payment-agreement-application
  3. Discretionary installment agreements. If you owe more than $50,000, or owe less but cannot pay off the balance within 60 or 72 months, you have to negotiate with the IRS, and make a direct appeal to its discretion in order to have an installment arrangement granted. As a practical matter, what this means is that you have to provide a completed Form 433-A statement - the invasive and comprehensive baring of your financial soul, giving the agency a roadmap to everything you own and owe. This document is signed under penalties of perjury, so you want to be especially careful about being truthful, accurate and not intentionally or carelessly omitting requested information. This is certainly not something you ought do yourself. How the information is presented to the IRS, including asset valuations, income presentations, living expense documentation, and special circumstances, needs to be considered in the context of established criteria, changing policy initiatives, and historical treatment.
  4. Partial installment agreements are arrangements whereby the IRS agrees to take monthly payments in an amount less than that which will result in full payment of the outstanding balance in the time left on the collection statute of limitations (generally ten years from the time the tax liability is recorded on the IRS' books). These are granted based on financial hardship and, like the discretionary installment agreement, require the submission of a completed form 433-A financial statement, with supporting documents, in order for the IRS to consider the proposed arrangement.

Note that, if you have any years for which you have not filed a tax return, these must be prepared and submitted first, before the IRS will even consider an installment arrangement (or any other type of collection resolution alternative to asset seizure or bank account/wage levy). And note that adding additional tax liabilities for subsequent years will default the established installment agreement.

Contact Our Chicago Tax Lawyers

Here at the Tax Practice of IIT Chicago-Kent College of Law, we have decades of experience completing and submitting IRS financial forms and negotiating a variety of different types of discretionary and partial installment arrangements, including creative and hybrid arrangements to fit a client's specific financial and personal circumstances. Our proven success is based on immediate intervention, a personalized resolution plan, strong and long-standing professional relationships with agency employees, and a thorough knowledge of what the government can and cannot do. At the Tax Practice of IIT Chicago-Kent College of Law, you can rely on aggressive, ethical, and personalized representation – I encourage you to make your problem our problem to solve.

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