Tax Tip of the Week
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For the week of
March 13, 2000
You might qualify for paying Uncle Sam in installments
If you have a federal tax liability, you may be eligible to
pay the balance due under an installment agreement. You must be current on the filing of all required federal tax
returns to qualify for an installment agreement with the IRS.
Generally, the Internal Revenue Service has ten years from the assessment of a tax liability to collect the tax.
The date by which the full tax must be collected is called the Collection Statute Expiration Date (CSED). If you
file an installment agreement request, your account will be reviewed to ensure your liability, including penalties
and interest, will be paid in full by the CSED prior to approval of the agreement.
By approving your request, the IRS agrees to let you pay the tax you owe in monthly payments instead of requiring
you to immediately pay the amount in full. In return, you agree to make your monthly payments on time and to pay
all your future tax liabilities. This means you must have adequate withholding or estimated tax payments so that
your tax liability for future years is paid in full and on time.
You will be charged a $43 fee if your request for an installment payment plan is approved. You will be charged
interest and may be charged a late payment penalty on any tax not paid by its due date, even if your request to
pay in installments is granted. To limit interest and penalty charges, file your return on time and pay as much
of the tax as possible with your return. Before requesting an installment agreement, you should consider other
less costly alternatives, such as a bank loan.
If installment payments are approved, you can arrange to have the payments made by a direct debit to your bank
account.
If you would like assistance with your tax matters,
please contact us. We work with the IRS on a regular basis and may be able to help you make your life a little
less taxing.
Click here to view previous tax tips.
"Tax Tips" are published weekly to
provide useful tax information. Return to this site every week for helpful tax-cutting suggestions, tax reminders,
and current tax information.
The information contained in this site is of a general nature and should not be acted upon in your specific situation
without further details and/or professional assistance.
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to receive other tax-cutting information from time to time, please contact our office. We're here to help.
