How to set up a payment plan with IRS or Minnesota Dept Revenue?

Eagan MN

05 April, 2021

12:29 AM

Description

I represent taxpayers in Twin Cities, Minnesota and all the 50 States in the United State before all administrative levels—examination, collection, and appeals—of the Internal Revenue Service (IRS). If you owe back taxes to the IRS. The IRS may allow you to set up a payment plan (Installment Agreement) to pay the debt if you meet certain conditions. The primary condition is to be in “Tax Compliance” that means you have file all your back taxes return(at least the last six years of tax return) and you are current on estimated payments, payroll taxes if you are a business. Before setting up a payment you can ask for penalties with associated interest to be removed. This will reduce the amount you have to pay every month. TYPES OF PAYMENT PLAN An installment agreement is simply a payment plan or agreement between the IRS and a taxpayer to allow the taxpayer to pay their back-tax debt in monthly payments. There are various forms of installment agreement, each of which has special rules. The four types of installment agreements are: Automatic (if you owe less than $10,000) Streamlined(If you owe less than $50,000) Regular Partial - Pay Automatic Installment Agreement. Also called Guarantee Installment Agreement  is where a taxpayer owes less than $10,000 in tax and during the past 5 years has not owed any tax or had an installment agreement that means: In compliance - Your previous five years’ returns may not have been filed or paid late. You have not used an installment agreement plan option within the previous five years. You can pay the entire amount within three years or less. This installment program is simple enough to apply for yourself online, and you are likely to qualify for this agreement if you meet the criteria for your past taxes. Also, you do not need to provide a full financial statement to the Internal Revenue Service. Streamlined Installment Agreement A streamlined installment agreement is very similar to the automatic installment agreement. If a taxpayer meets the following criteria, they can simply make a phone call to the IRS and arrange an installment agreement: • The taxpayer owes less than $50,000 • The taxpayer has not had a back-tax debt or an installment agreement in the last 5 years • The taxpayer agrees to full pay the liability within 72 months or before the Collection Statute Expiration Date (“CSED”), whichever occurs first. Just like an automatic agreement, with a streamlined agreement the taxpayer does not have to provide any financial information. The taxpayer can create an agreement with just a phone call (or going to the IRS website). Regular Installment Agreement When a taxpayer cannot meet the requirements of a streamline installment agreement because the taxpayer owes more than $50,000 or because of IRS collection statutes limitation is about to expire (the IRS does not have enough time to collect on the debt).The taxpayer will be required to complete a collection information statement (IRS Form 433). The IRS thoroughly reviews your financial situation so you can pay the debt off as early as possible. And this time, you will need to furnish a financial statement. At this point you should get a tax professional to help you. A tax professional can make sure you get the IRS all the required financial information and fill out a Collection Information Statement (Form 433-F or Form -433A or Form 433-B (if you own a business)).   Partial Payment Installment Agreement The IRS may allow you to pay part of your debt if you show you cannot afford the minimum payment for a guaranteed or streamlined installment payment plan. A partial payment agreement allows you to take longer to repay, and the IRS will evaluate your financial position every 18 months to see if you are better off. They will include your equity in assets in their calculations. In case you cannot afford the payment plan or you cannot afford the payment plan that is currently in place with the IRS or Minnesota Department of Revenue because of change in your financial situation. There are other options that you could use to settle your back taxes. The options are Currently Not Collectible and and Offer in Compromise. If you or anyone you know have unfiled returns and have back tax issues with the IRS or State . Please feel free to contact me by phone or email. Joe Alabi EA MAcct (Taxation) FishCoin Tax Solutions 4124 Quebec Avenue North Suite 307 New Hope, MN 55427 Phone : 612 516 5878 Fax: 651 409 2021 Email : [email protected]