Review the tax debt to make sure you owe it. If you think you don't owe the tax, now's the time to talk to the IRS about it. If you received a notification from the IRS, start by calling the number on the notice to discuss the amount you owe. The IRS won't consider an installment agreement if you have outstanding tax returns, so you must have filed all of your tax returns.
If they agree to the partial payment agreement, the IRS has the right to review their agreement every two years. They may ask you for updated financial information to see if you can make a larger payment. If you don't agree, you'll have to show why you can't afford a higher monthly payment. An active installment agreement does not prevent the Department from taking your income tax refund and applying it to your outstanding tax debt.
This can be so overwhelming that they choose to ignore the problem, since they know that they can't pay such a large amount to the IRS. In circumstances where a partial payment plan is justified, the IRS will receive all available collection sources to determine your ability to collect. The Department will send you a letter notifying you that you have not made a timely payment under the agreement and will provide you with an opportunity to make the payment within a limited period of time to avoid cancellation. We cover the differences and similarities between these IRS tax professionals to help you understand who they are.
If you can make monthly payments that settle the entire tax liability, then an installment agreement would be the best option for your situation. A partial installment payment agreement (PPIA) is a monthly payment plan option for taxpayers who have a tax balance but cannot pay the balance in full within the remaining time the IRS has to collect, called the expiration date of the collection statute (CSED). It should also be noted that the taxpayer can establish a payment plan while a year is being reviewed or audited. With a partial installment agreement (PPIA), you make monthly payments to the IRS up to the expiration date of the collection statute (CSED), at which time the remaining tax debt is forgiven and erased.
However, this normally only occurs in situations where an embargo, seizure or seizure would not substantially affect compliance with the outstanding tax obligation or would not be appropriate. In Oklahoma, the state sales tax is 4.5% and applies to sales of certain services and tangible personal goods. Partial payment plans are difficult to come by because the IRS is basically waiving the full balance due. If you owe back taxes to the IRS, contact a Polston tax lawyer to protect your rights and help you negotiate an affordable payment plan.
In addition, you are also expected to keep up to date with any new tax obligations, such as making quarterly estimated tax payments, filing your tax returns and paying new taxes as they come due. The due date of the collection statute is usually 10 years from the date the tax was calculated or when you filed your tax return. Partial payment plans basically recognize that, sometimes, it is not economically feasible for a taxpayer to pay the full balance due and, instead, they create a method to pay as much of their back tax liability as possible without putting them in financial difficulty and without the IRS resorting to adverse collection activity.