Trying to fight a massive tax bill? The Internal Revenue Service (IRS) and the State of California Franchise Tax Board (CA FTB) will set up Streamlined Installment Agreements to assist taxpayers that cannot pay their back taxes in full within a short period of time.
What is a Streamlined Installment Agreement?
An Installment Agreement is an agreement with the IRS or CA FTB to make monthly payments based on the total debt and the period of time you want to pay the debt off. A Streamlined Installment Agreement will also reduce future penalties and interest and prevent future collection activity such as wage garnishments and/or bank levies.
Why would I want to set up a Streamlined Installment Agreement?
An Installment Agreement puts you in control where you know how much to pay the IRS or CA FTB, and often puts 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.
How much will I have to pay monthly?
The IRS will give individuals up to 6 years or 72 months to pay off debts where the total assessed balance is less than $50,000.00. If you make a good living and do not want to pay the IRS the most they can demand from you, you could set up a much lower payments by using this program. The CA FTB will setup a Streamlined Installment Agreement for total assessed balances of less than $10,000 with a payment period of 3 years or 36 months.
Do I have to pay off the entire debt?
Yes, with this program a taxpayer must be able to pay off the entire debt under the terms of the agreement. The IRS or FTB will not setup a Streamlined Installment Agreement if the debt will expire too soon, or the amount you propose will not pay off the debt in the maximum time allowed.
Sacramento Tax Debt Resolution Attorneys
The skilled lawyers of Bowman & Associates help clients across California with tax debt from our offices in Sacramento and Folsom. If you or someone you know has legal questions about Streamlined Installment Agreements, contact our law firm today to see if you qualify. We offer free a free case evaluation.
