The Internal Revenue Services (IRS) and the State of California Franchise Tax Board will set up Installment Agreements to assist taxpayers that cannot pay their back taxes in full within a short period of time.
What is an Installment Agreement?
An Installment Agreement is an agreement with the IRS or CA Franchise Tax Board to make monthly payments in exchange for reduced future penalties and interest, no future collection activity such as wage garnishments and/or wage garnishments.
Why would I want to set up an Installment Agreement?
An Installment Agreement puts you in control where you know how much to pay the IRS or CA FTB, and often puts you in control of making the payments. It also greatly reduces the interest rate and penalties accruing on your tax debt from as high as 30% to as low as 4%. That makes a BIG difference in the total you will pay over time. Some taxpayers get garnished and think everything is taken care of – until their bank accounts are then wiped out. If you do not have an agreement set up with the IRS of CA FTB it is a great idea to get one set up and our Sacramento taxt debt resolution attorneys can help.
How much will I have to pay monthly?
The amount to be paid monthly on an Installment Agreement can be determined two ways. Our experienced Sacramento debt resolution lawyers will help you determine which way works best for you. The next section will discuss Streamlined Installment Agreements. The other way is by using your financial information to determine how much you can afford to pay on a monthly basis. IF you do not get professional advice you could end up paying a lot more than you need to as the IRS and CA FTB will try to get you to pay as much as possible each month – they are collection agencies.
Do I have to pay off the entire debt?
No you do not! If you qualify for an Installment Agreement of $50.00 a month the IRS and CA FTB will have to take that monthly payment for at least two years, regardless of how much you owe. You could owe $50,000 and pay only $50.00 a month. If your debt is expiring you can pay your monthly payments of $50.00 until the rest of the debt goes away! Even if you don’t qualify for a Hardship or Offer in Compromise you might be able to save a lot of your money with a good Installment Agreement.
Speak to our Sacramento tax debt resolution attorneys today to review your case and see what programs you might qualify for! We’ve helped hundreds of clients reduce or completely wipe out their overdue tax debt in California and we can help you. Call or email today for a free case evaluation.
