Can You Renegotiate Your IRS Installment Agreement? Should You?

You’ve faithfully paid your IRS installments for months or even years. Circumstances change, however, and the arrangements that previously worked may no longer be ideal. Now, you face a difficult decision: renegotiate your installment plan or stick with the status quo?

Using the IRS Online Payment Agreement Tool

In some cases, it’s easiest to make installment agreement changes via the official IRS payment tool, which is easily accessible from the agency’s website. Available for both individuals and Powers of Attorney (POA), this approach allows you to change your due date or your monthly payment amount. Keep in mind that the new amount must meet the requirements established by the IRS.

Renegotiating to Secure New Minimum Requirements

If you’re unable to meet the requirements referenced by the online IRS payment tool, you may need to take additional steps to achieve a lower amount. Typically, this process involves completing and submitting IRS Form 433-F, which is also known as the Collection Information Statement. This document requires you to provide detailed information about your financial accounts and lines of credit. This information helps the IRS determine whether you actually need a lower monthly payment.

When to Avoid Renegotiating

Keep in mind that, while lower payments can provide some peace of mind for now, it’s not always the ideal approach in the long-run. The less you pay each month, the more likely you are to rack up heavy interest over time. If you can find room in your budget for a slightly higher payment each month, you’ll save quite a bit by the time your installment plan is complete.

If you’re ready to try for a more favorable IRS installment agreement, be sure to work with a tax resolution service you trust. The team at the Highland Tax Group is happy to help. Reach out to learn more.