Friday, November 21, 2008

IRS Installment Agreements

Taxpayers have lots of questions regarding installment agreements with the IRS. One question that comes up quite frequently concerns whether or not the taxpayer can roll a new tax year’s liability in with the pre-existing installment agreement. The only way this can be done successfully is to completely re-negotiate the installment agreement with the IRS. Whenever the IRS sets up an installment agreement with a taxpayer the agreement calls for the taxpayer to file all future returns and pay future taxes on time. If not, this alone will default thee agreement.
If the current agreement with the IRS is defaulted then the taxpayer goes right back into the collection cycle and may face liens and levies once again. Another point to consider is if the liability from the new tax year when added to the prior balance causes the total liability to go over $25,000 the an extensive negotiation with the IRS must take place. The best way to handle a situation like this is to have a professional tax resolution firm handle it.

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