Navigating The IRS: Understanding The Ins And Outs Of IRS Installment Agreements

Navigating the landscape of tax laws can often seem daunting, especially when you find yourself owing taxes to the Internal Revenue Service (IRS). If you’re in a position where you can’t pay your tax debt in full, don’t panic. An IRS installment agreement can offer a workable path to gradually resolve your tax debts and avoid more serious consequences.

Understanding the IRS Installment Agreement

Fundamentally, an IRS installment agreement serves as a structured repayment plan, allowing taxpayers to pay their tax liability within a certain time frame, generally 72 months. This helps taxpayers unable to pay off their tax debts in full by avoiding a big detrimental lump sum payment and thereby getting out of IRS collection activity by safely being placed in a payment plan.

The arrangement of this installment agreement usually revolves around monthly payments. The calculation of these payments is based on a careful evaluation of the total tax due and can be assessed based on the financials of the taxpayer. While this agreement can lighten the load with smaller repayments, it’s crucial to remember that the remaining tax debt balance will continue to accrue interest and penalties until it is completely paid off, in most cases.

Eligibility and Application for an Installment Agreement

Eligibility for an IRS installment agreement depends on a few factors, including your tax debt amount, your previous tax filing and payment history, your ability to pay the amount owed, and the time remaining for the IRS to collect the tax.

Applying for an installment agreement can be done generally online or via phone or mail, using the appropriate IRS form. For those who owe $50,000 or less in combined tax, penalties, and interest, the online payment agreement application can be used. For tax debts over this amount, taxpayers must complete a financial statement to determine the monthly payment amount for an installment agreement.

Potential Consequences of an Installment Agreement

While an installment agreement can provide taxpayers with the much-needed tax relief of a manageable payment plan, it’s not without potential consequences. As mentioned earlier, interest and penalties continue to accrue on the unpaid portion of the tax debt until it’s fully paid off. Additionally, if you default on your agreement, the IRS can take enforcement action, such as filing a notice of federal tax lien or issuing a bank levy or wage garnishment.

Ensuring Successful Completion of an Installment Agreement

Successfully navigating an IRS installment agreement involves keeping up with the payment schedule and staying in compliance with tax laws. This means filing all required tax returns on time and making all required payments. If you’re facing difficulties with your payments, it’s critical to contact the IRS or a tax attorney promptly to discuss possible changes to your IRS agreement.

An IRS installment agreement can be a lifeline for those who can’t afford to pay their tax debt in full. It’s an opportunity to resolve tax debts gradually while avoiding more severe consequences. However, it’s not without potential pitfalls and requires careful management and a commitment to staying current with all tax obligations. If you’re considering an installment agreement, it’s advisable to consult with a tax attorney to fully understand the tax implications and requirements involved.

Text-Image__what-happens-if-you-are-audited-and-found-guilty-1200x628 Blog Archive

What Happens if You Are Audited & Found Guilty?

The IRS takes notice of any circumstances within your federal tax return which may be indicative that something is wrong. These IRS warning signals, also ...
Text-Image__what-is-a-tax-audit-all-you-need-to-know-1200x628 Blog Archive

What Is A Tax Audit? All You Need To Know

Stepping into the realm of tax laws can sometimes feel like venturing into a maze. To add to the complexity, if you’ve ever wondered what ...
Text-Image__4-reasons-to-hire-an-attorney-1200x628 Blog Archive

4 Reasons To Hire A Tax Attorney

Dealing with tax issues can be a daunting task for most individuals, especially when complex situations arise. This is where the experience and knowledge of ...
Text-Image__tax-attorney-vs-cpa-4-key-differences-1200x628 Blog Archive

Tax Attorney Vs. CPA – 4 Key Differences

When it comes to managing your taxes, you might find yourself asking whether to seek the assistance of a tax attorney or a certified public ...

Notice: All information on this website has been prepared for informational purposes only and does not constitute legal advice. -- View full disclaimer here.

Scroll to Top


Federal IRS Practice.  Attorney advertisement. Prior results do not guarantee similar outcomes. (1) Attorneys of Delia Law P.C. are only licensed in the jurisdictions mentioned in their biographies and not all lawyers mentioned or displayed in Website content may be able to assist clients without adding attorneys admitted in the specific jurisdiction; (2) Delia Law P.C.’s only offices are in Maryland and New York. Mentioned other locations are unstaffed virtual locations, by appointment only, that are not designed to suggest or create a permanent presence; (3) Local counsel are independent and not partners or employees of Delia Law P.C.; (4) All clients of Delia Law P.C. will receive additional, written information (about the lawyer assignment/licensing in the case, our fees etc.) before making a decision to becoming a client. All website Terms and disclaimers apply.

Prior results do not guarantee similar outcomes; attorney advertising. All information on this website has been prepared for informational purposes only and does not constitute legal advice. While this information may constitute attorney advertising in some jurisdictions, merely reading this information does not create an attorney-client relationship. Every case is different, any prior result described or referred to herein cannot guarantee similar outcomes in the future. All visitors to this Website are informed that Delia Law P.C. (“Firm”) works with affiliated lawyers (referred to as “Local Counsel”) in various cities and states across the United States. These Local Counsel may assist the Firm on a case-by-case basis, operate their own respective law firms, are independent of Firm, and are not partners, owners, of counsel, or employees of Firm. Clients and prospective clients should be aware that when referencing to Firm’s experience, this experience may combine the knowledge and experience of both Firm and its frequently used Local Counsel in the aggregate. Specifically, if and when Firm cooperates with Local Counsel, Firm will disclose the details to the client in writing for their approval. Delia Law P.C. is headquartered in New York City. References to a particular city or state in any article or anywhere on this website does NOT mean that Firm maintains an office with staff in that location, and it does NOT mean that Firm has attorneys physically located in that city or state. Firm’s lawyers are only licensed to practice state law in the states mentioned in their respective biographies. With few case-by-case exceptions, Firm’s practice is limited to matters and questions of federal law and federal procedure. Firm’s engagement letter and Firm’s website disclaimers provide additional details.