After exhausting all efforts to resolve your tax debt, you have come to the conclusion that the only thing that is available to you is to pay the darn thing off. If that is you, and this conclusion was helped met by talking with a licensed professional, there are some smart options for you to take moving forward. One of those options is to enter into a payment plan where it doesn’t matter how much money you may have left over after bills are paid and one in which liens are removed and new liens won’t be filed. This is called a Streamlined Payment Plan.
First, do you owe less than $50,000?
In order to enter a streamlined payment plan, you have to owe less than $50,000 to the IRS. Thankfully this amount was raised from the recently previous amount of $25,000. This amount is the assessed tax liability amount, not the actual amount that you owe including interest and penalties. Therefore, you could possibly really owe about $52,000 and still qualify. If you owe more than $50,000 in assessed tax liability, then this payment plan is not an option for you until you get to that threshold. The IRS will normally ask if it is possible for you to pay the debt down to get to that level, either in lump sum or in payments. If you owe more than $50,000 you have to negotiate a payment plan and go through finances with the IRS.
Your Payments
Your payment amounts are calculated on a 72 month payment plan. This is true unless the tax debt will expire before then. If that is the case, then the calculations are met by how many months are left on the statute period for the IRS to collect. If it comes to the point that they are higher because of this fact, you should talk with a licensed professional about your options in doing a partial payment plan or even a high offer in compromise. So for most, if you owe let’s say $10,000, your monthly payments would be about $140 a month, regardless of your amount of income, expenses, or equity in assets.
Liens
The beauty of this type of payment plan really lays with the lien protection. If no liens have yet been filed against you, by entering this type of plan, no liens will be filed as long as you remain in the plan. If a lien has already been filed, then you can petition to have the lien removed through a lien removal process. This falls into qualifying criteria as we discussed in a previous blog article.
Do I need to hire someone to do this?
Most simply, no. If you know you don’t qualify for relief of any kind, and have scheduled to hire someone down the road for penalty abatement, and don’t have any live liens filed against you, you don’t need to hire any company to setup a payment plan for you. It takes about an hour, most of which is because you’ll be on hold waiting for the IRS on the phone. Ask for a streamlined payment plan, and you’ll be set. If you want to talk with someone about penalty abatement, lien removal, or to make sure you don’t qualify for other relief types, then call 619-352-4188.