Installment Agreement Request
If you have been contacted by the Internal Revenue Service (IRS) or South Carolina Department of Revenue (SCDOR) regarding unpaid taxes, penalties and interest and you cannot afford to pay the balance due all in one lump sum, you may be able to secure an Installment Agreement to pay the balance in monthly installments.
An Installment Agreement is an alternative payment arrangement that allows you to pay off your past due taxes, penalties and interest over time. Taxing authorities routinely grant eligible taxpayers these agreements in order to secure a recurring payment stream rather than relying on voluntary payments which may be infrequent or nonexistent.
In order to establish an Installment Agreement with the Internal Revenue Service (IRS), a taxpayer must request the agreement. While an Installment Agreement request is being considered, the IRS generally files a Notice of Federal Tax Lien to secure its interest against other creditors. However, in general, the IRS may not pursue enforced collection actions while an Installment Agreement request is being considered, while an Installment Agreement is in effect, for 30 days after a request for an Installment Agreement has been rejected, and for any period while a timely appeal of the rejection or termination is being evaluated by the IRS. This means that the once the Installment Agreement is requested, the IRS refrains from issuing wage garnishments or bank levies, and from making harassing phone calls. Penalties and interest will continue to accrue on the unpaid portion of the debt throughout the duration of the Installment Agreement.
While the IRS allows for a payment arrangement for past due taxes through an Installment Agreement, a taxpayer must be compliant with all prior tax filings before establishing the Installment Agreement. Once established, all payments in accordance with the Installment Agreement must be made in a timely manner, and failure to make timely payments can cause default. A default of the Installment Agreement may result in IRS enforced collection actions, including bank levies and wage garnishments.
If you or your business owes $10,000 or less in taxes, you are guaranteed an IRS Installment Agreement. If you or your business owes $25,000 or less in taxes, penalties, and interest, then you are eligible for the IRS Streamlined Installment Agreement under the law. If you or your business owes more than $25,000 you may need the assistance of a tax collection lawyer to help secure an IRS Installment Agreement on favorable terms.