How to Negotiate an Installment Agreement with the Irs

Negotiating an installment agreement with the IRS can be a daunting task, but it is important to know that it is possible and can help you take control of your financial situation. Here are some key steps to follow when negotiating an installment agreement with the IRS:

Step 1: Gather your financial information

Before negotiating with the IRS, it is important to have a clear understanding of your financial situation. This involves gathering all your financial information, including your income, expenses, and debt obligations. You should also have a clear understanding of how much you owe the IRS and the terms of your existing tax debt, including any penalties and interest charges.

Step 2: Determine your budget

Once you have a clear understanding of your financial situation, you can begin to develop a budget that will help you manage your payments to the IRS. This budget should take into account all of your income and expenses, including any necessary expenses such as housing, food, and transportation. Based on this budget, you should determine how much you can afford to pay the IRS each month.

Step 3: Contact the IRS

Once you have a budget in place, it is time to contact the IRS to negotiate an installment agreement. You can do this by calling the IRS directly or by filling out Form 9465, which is the installment agreement request form. When contacting the IRS, be prepared to provide your financial information, including your income, expenses, and debts. You should also be prepared to explain why you are unable to pay your full tax debt upfront.

Step 4: Negotiate with the IRS

During the negotiation process, it is important to be clear and honest with the IRS about your financial situation. You should also be prepared to explain why you are unable to pay your full tax debt upfront and provide evidence to support your claims. It is important to remember that the IRS is willing to work with taxpayers who are genuine about their financial difficulties.

Step 5: Finalize the agreement

Once you and the IRS have reached an agreement, you will need to finalize the agreement by signing the installment agreement agreement. This document outlines the terms of your payment plan, including the amount you will pay each month and the length of the agreement. Be sure to review this document carefully before signing it and keep a copy of the agreement for your records.

In conclusion, negotiating an installment agreement with the IRS can be a challenging process, but it is possible with proper preparation and communication. By following these key steps, you can take control of your financial situation and work towards paying off your tax debt.