Existing Installment Agreements Irs

If you owe the Internal Revenue Service (IRS) a significant amount of money, you may be able to enter into an installment agreement with them to make payments over time rather than paying the entire balance in one lump sum. In fact, according to a report from the Government Accountability Office, the IRS approved nearly 2.7 million installment agreements in 2018, indicating that this is a common option for taxpayers who need more time to pay their taxes.

However, what happens if you already have an installment agreement with the IRS and are struggling to keep up with the payments? Fortunately, there are options available to you.

The first step is to contact the IRS immediately if you are unable to make a payment. The agency may be able to work with you to modify the terms of your agreement, such as lowering your monthly payment or extending the length of the agreement.

It is important to note that interest and penalties will continue to accrue on your balance until it is paid in full. This means that even if you are unable to make a payment, you should continue to file your tax returns on time to avoid additional penalties.

Another option is to request a temporary delay of payment. This may be granted if you are experiencing significant financial hardship, such as a job loss or a medical emergency. However, interest and penalties will continue to accrue during the delay period.

If you are unable to meet the terms of your installment agreement and do not qualify for a temporary delay of payment, the IRS may consider a compromise offer. This is where you offer to pay a lower amount than what you owe in exchange for settling the debt. However, this option should only be pursued after all other options have been exhausted and you have consulted with a tax professional.

In summary, if you already have an installment agreement with the IRS and are struggling to make payments, it is important to contact the agency immediately to explore your options. The IRS may be willing to modify the terms of your agreement, grant a temporary delay of payment, or consider a compromise offer. Remember, interest and penalties will continue to accrue until your balance is paid in full, so it is important to stay current with your tax filings even if you are unable to make a payment.