Qualify for a Guaranteed Installment Agreement: A Step-by-Step Guide
If you owe the IRS back taxes, you may qualify for a guaranteed installment agreement. A guaranteed installment agreement is a payment plan that allows you to pay off your tax debt in monthly installments without the risk of a tax lien or levy. However, not everyone qualifies for this type of plan. In this article, we’ll break down the steps you need to take to qualify for a guaranteed installment agreement.
Step 1: Determine Eligibility
To qualify for a guaranteed installment agreement, you must meet the following criteria:
– You owe the IRS less than $10,000 in tax debt (excluding interest and penalties).
– You can pay off your tax debt within three years.
– You have filed all required tax returns.
– You have not entered into an installment agreement in the past five years.
– You agree to make all scheduled payments on time.
If you meet all of these criteria, you may be eligible for a guaranteed installment agreement.
Step 2: Apply for an Installment Agreement
To apply for a guaranteed installment agreement, you must submit Form 9465, Installment Agreement Request, to the IRS. You can file this form online, by mail, or over the phone. The IRS will review your application and determine if you qualify for a guaranteed installment agreement.
If the IRS approves your application, they will send you a notice that outlines the terms of your installment agreement. This notice will include the amount you owe, the monthly payment amount, and the due dates.
Step 3: Make Your Payments on Time
Once you have been approved for a guaranteed installment agreement, it is important to make all of your payments on time. If you miss a payment, you will be in default of your agreement, and the IRS may take collection action against you, such as a tax lien or levy.
To make it easier to make your payments on time, consider setting up automatic payments from your bank account. This way, you won’t have to remember to make your payments each month.
Step 4: Keep Your Information Up to Date
If your financial situation changes during the term of your installment agreement, it is important to notify the IRS. For example, if you lose your job or experience a significant reduction in income, you may need to renegotiate your payment plan. By keeping the IRS informed of any changes in your financial situation, you can avoid defaulting on your agreement and facing collection action.
In conclusion, qualifying for a guaranteed installment agreement can be an excellent way to pay off your tax debt in a manageable way. By following these steps, you can increase your chances of being approved for an installment agreement and avoiding collection action from the IRS.