IRS Installment Agreement
A formal payment plan with the IRS that allows taxpayers to pay tax debt over time, monthly, instead of in a single lump sum.
Detailed Explanation
The IRS offers several installment agreement types: short-term (under 180 days), guaranteed (under $10,000 owed, paid in 36 months), streamlined (under $50,000 owed, paid in 72 months), and non-streamlined (larger balances, requiring full financial disclosure on Form 433-F or 433-A). Interest and failure-to-pay penalties continue to accrue, but the failure-to-pay penalty is reduced from 0.5% to 0.25% per month while an agreement is active. Defaulting on an agreement can trigger collection action.
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Learn about IRS & State Tax ResolutionRelated Terms
Offer in Compromise (OIC)
An IRS program that allows qualifying taxpayers to settle tax debt for less than the full amount owed, when full payment would create a financial hardship.
Penalty Abatement
IRS forgiveness of failure-to-file, failure-to-pay, or accuracy-related penalties under specific qualifying circumstances.
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