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Installment Agreement

Baltimore tax attorneys help taxpayers negotiate an IRS installment agreement in the Maryland & Washington DC area.

April 15 strikes a chord of fear in many who are unable to pay their federal taxes on time. The IRS is authorized to collect on unpaid tax obligations, and can enforce payment through seizing assets, wage garnishments and liens. Such extreme actions can be avoided by entering an agreed upon installment agreement that allows a series of monthly payments to the Internal Revenue Service until all tax debts are paid off.

Baltimore Tax Attorneys

While an IRS installment agreement can make repaying back taxes much more manageable, it often requires the capable assistance of Baltimore tax attorneys with extensive knowledge about current regulations and guidelines.

Rosenberg Martin Greenberg help clients develop an installment plan based on their particular economic situation and financial abilities. By enlisting our legal expertise, we can greatly increase your odds of settling tax debt for less than what is actually owed. Our debt relief attorneys consider your disposable income to negotiate affordable monthly installments with flexible payment options.

IRS Installment Agreement Overview

Before applying for an installment agreement with the IRS, taxpayers must be current with all past tax returns, which Rosenberg Martin Greenberg can help prepare, ensuring clients are in compliance.

There are four general types of installment plans, which are categorized as follows:

  • Guaranteed Installment Agreement – Those who owe $10,000 or less and meet the following four criteria are guaranteed an IRS installment agreement. 1. All tax returns are current. 2. Returns over the last five years have been filed on time, and income taxes paid on time. 3. You’ve not entered into an installment plan within the last five years. 4. Your balance can be paid off in 36 months or less.
  • Streamlined Installment Agreement- Taxpayers that owe $50,000 or less are eligible to enter a streamlined installment plan that must be paid off over a term or prior to the Collection Statute Expiration Date, whichever comes first. If more than $25K in taxes are owed, the IRS will demand that payments be automatically withdrawn from your personal bank account.
  • Partial Payment Installment Agreement – Those who cannot afford the streamlined or guaranteed installment terms may be better off with a partial installment agreement with the IRS. This agreement factors in basic living expenses to define a lower payment plan over a longer time frame. Note that the IRS may file a federal lien to protect its interests.
  • Non Streamlined Installment Agreement –  Taxpayers who need a repayment term longer than five years, or owe more than $25,000 and aren’t eligible for a guaranteed or streamlined installment plan will need to work directly with an IRS agent to achieve a non-streamlined installment agreement. In most situations, the IRS may ask that bank loans be taken out and assets sold to help pay off back taxes before entering such an installment plan.

Pros and Cons of Installment Plans

By creating an installment agreement with the IRS, tax payers can not only begin to pay off their debt, but also avoid hefty fees. Late payment penalties are reduced when the installment is created to about 0.25% of taxes owed per month as opposed to a 0.5% fixed monthly penalty that attaches prior to the creation of the installment plan.

An IRS installment agreement may also be especially advantageous for individuals who have filed for chapter 7 bankruptcy. This allows the taxpayer to reduce additional tax penalties while discharging the majority of unsecured debts simultaneously.

However, making monthly installments over a period of months and years will inevitably cost more due to interest charges, not to mention penalties for any late payments. The federal government charges a $105 set up fee for an IRS installment agreement, which can be cut in half if payments are automatically debited from a bank account.

As with any compliance issues, taxpayers are encouraged to consult qualified attorneys who are well-versed in IRS installment plans and other debt relief solutions.

At Rosenberg Martin Greenberg, we have found that the IRS often uses formulas that fail to account for the taxpayer’s true essential expenses, resulting in higher monthly installments than tax payers can reasonably afford. For this reason and others, it’s imperative to work with one of our experienced tax attorneys who can evaluate your financial status and help determine an affordable plan that will best suit your short and long-term needs.

Negotiating an Affordable IRS Installment Agreement

Rosenberg Martin Greenberg' s tax attorneys look at assets, outstanding debt, disposable income and expenses to negotiate an installment agreement that benefits the taxpayer, and will not impose too great a burden financially. In addition to ensuring all outstanding tax returns are filed and proper forms submitted, our tax professionals will continue to negotiate should the IRS reject your first IA (installment agreement) proposal.

Installment plans can help boost your credit score, get federal tax liens withdrawn and turn a major tax problem into a manageable situation. However, walking away with an affordable plan takes the expertise and guidance of tax attorneys who can ensure the IRS reviews a complete picture of your true financial status.

Flexible payment methods are also a part of the equation, with installments made via the following:

  • Direct bank account debit
  • Check or money order
  • Payroll deductions
  • Credit card
  • Electronic Federal Tax Payment System (EFTPS)
  • Online Payment Agreement

Tax Relief Attorneys in Baltimore

It’s crucial to keep in mind that an installment agreement does not extend the statute of limitations (10 years) for IRS collections. If you’d like to schedule a consultation with a Baltimore tax attorney at Rosenberg Martin Greenberg, please contact Brian Crepeau at 410.649.4981, bcrepeau@rosenbergmartin.com.

We represent Maryland and Washington D.C. area residents in need of tax relief and litigation assistance.

Talk to a Baltimore Tax Attorney Today

If you are seeking counsel for a tax related legal matter, contact the Rosenberg Martin Greenberg Tax Controversy experts.

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Rosenberg Martin Greenberg

705 Melvin Avenue Annapolis, MD 21401
Phone: 410-727-6600
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