IRS Installment Agreements for Businesses: How Do They Work?

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Many individuals take advantage of IRS installments to keep tax debt from getting overwhelming — but did you know that this option is also available for businesses?

Installment agreements address tax debt by building in plenty of time to tackle the issue little by little. Keep reading to learn how these agreements work:

How can I apply for business installments?

The IRS offers the convenience of online installment applications in select situations. For businesses, this option is only available for those seeking long-term installments to cover $25,000 or less.

Sole proprietors should apply for payment plans as individuals. This is beneficial, in part, as online applications are available for both short and long-term individual plans.

When applying, you’ll need to provide details such as:

  • Your Employer Identification Number (EIN)
  • The date on which your business was established
  • The address for your recently filed tax return 

How are installments handled for LLCs?

IRS installments are relatively straightforward for sole proprietors. With LLCs, however, installment eligibility and procedures vary based on the designation of the single member owner (SMO).

If only the LLC is classified as the taxpayer, the installment agreement also takes place with the LLC. Likewise, if only the SMO is the taxpayer, the installment agreement occurs with the SMO — even if tax liabilities are assessed under the LLC’s name or EIN.

How Should Installments Be Paid?

Requirements for paying IRS installments vary based on the amount of debt and whether the agreement involves an individual or business. For businesses owing over $10,000, these payments occur via direct debit.

Can Business Installment Agreements Be Revised?

Installment agreements for both businesses and individuals can often be revised to reflect changing circumstances. Common adaptations include the monthly payment’s due date and amount. Revisions are also available when reinstating installment agreements after defaulting.

Would you like to get started with an IRS installment agreement for your business? The Highland Tax Group can guide you through this process. We’ll help you find the best tax resolution possible, so don’t hesitate to reach out today.