When you qualify for an installment plan, the IRS determines the monthly payment based upon your disposable income. If the debt is below $25,000 the IRS usually does not require financial statements. For debt over $25,000 the IRS requires a financial assessment to determine the payment amount for the plan. Effective planning and negotiation will give the IRS reason to agree to a 60-month installment plan. A streamline agreement allows you to have monthly payments deducted from your bank account or credit card.
If you do not qualify for the 60-month installment plan, then one of the plans below can be used to expand the payback period.
• Form 433-F is an abbreviated financial statement or “Collection Statement.” The IRS takes into consideration the household income and then offsets this amount by deducting expenses that are vitally necessary for you to live on. The remainder is called discretionary income, which the taxpayer is able to pay the IRS and typically becomes the installment amount.
• Form 433-A is a Collection Information Statement for Wage Earners and Self-Employed Individuals. It is used when debt is $50,000 or higher and more detailed than the 433-F. This form includes income such as lines of credit, merchant accounts, property assets, investments, and other potential sources of income that may be used to pay back the IRS.
• Form 433-B in a Collection Information Statement for Businesses. It is used to determine the financial capability of a company to pay its back taxes and other monetary obligations. This form requests information such as employee identification numbers, you business entity, number of employees, monthly payroll and gross revenue, the names of all partners, bank accounts, etc. If the company is unable to pay its debt, the IRS may each corporate officer personally responsible for the liability.
No matter how much you owe, United Tax Group is able to establish a payment plan that works with your budget. Call us at (888) 662-7004 to speak with one of our representatives.