How Many Installment Agreements Can I Have with the IRS?

Taxpayers can only have one installment agreement with the IRS. If you have an existing installment agreement covering tax debts in prior years and you find that you cannot pay your current year’s tax bill, you cannot seek another installment agreement. Instead, you will have to ask the IRS to amend the installment agreement you have to add the additional debt. However, you should consider discussing this with a tax attorney to determine if this is your best option.

What Is an IRS Installment Agreement (IA)?

Taxpayers who cannot afford to pay their taxes at once can request an IRS installment agreement that allows them to pay their taxes over time. There are different types of installment agreements, each with its own requirements, so it is important to understand which one may be the most appropriate. Notably, interest and penalties continue to accrue on unpaid tax balances during the period the IA is being paid off. As a result, it may be better to get a loan to pay your taxes if the loan’s interest rate is less than what the IRS would charge in interest and penalties.

Can You Have More Than One Installment Agreement?

When you enter into an IA, you agree to continue to pay your future taxes while also paying off the past debt in accordance with the IA. If you cannot pay your current taxes, your IA will default. Accordingly, you must contact the IRS to add the new balance to your existing IA. You will not be permitted to have more than one installment agreement with the IRS.

What Steps Should You Take If You Cannot Pay Your Current Taxes?

You can amend your IA as just noted by contacting the IRS. However, the fact that you are having problems paying your taxes may indicate that you should look at whether you may qualify for other options for resolving your IRS problems.

A tax lawyer can help you determine if you are eligible for other tax relief. For example, you may qualify for penalty abatement, which would mean that you could get the IRS to reduce or eliminate your late-filing or late-payment penalties.

Another option is an offer-in-compromise (OIC). Qualified taxpayers can apply to reduce their tax debts and settle for an amount that they can afford to pay.

Notably, these relief programs have strict requirements so you should get legal advice.

How Can a Tax Attorney Help You If You Owe Back Taxes?

An experienced tax lawyer can evaluate your situation and recommend the best option for resolving your tax matter. He or she can also handle the matter for you to help ensure that you comply with all rules and advocate on your behalf with auditors.

If you have a tax problem, contact us for a consultation. Our legal practice has focused solely on assisting taxpayers with their tax issues for over 25 years.