So you negotiated a payment plan with the IRS, and the agency is leaving you alone. Collection calls and demand letters have ceased, but you recently missed a payment deadline. What can you expect if you miss a payment on your IRS payment plan? Here’s the simple answer:
Communication is Your Friend
Contact the IRS as soon as possible if you anticipate a situation in which you cannot make a payment. The IRS has options available for those whose financial circumstances change, but you must call as soon as possible at 1-800-829-1040. You may be offered a reduced payment or temporary amnesty until your financial circumstances change. Keep in mind that you may be asked to provide proof of financial hardship, so have that information handy when you call.
Generally speaking, the more relief you ask for, the more documentation the IRS will require. For example, a month’s relief may require only a signed statement, but missing a couple of payments will necessitate additional documentation. Be prepared to offer this documentation in an efficient and respectful manner. Remember, the IRS can only work with the information you provide.
Don’t Ignore It
The worst thing you can do is ignore a missed installment on your IRS payment plan, The IRS will default your payment plan if you stop making payments without any notification. You can expect to receive a Notice of Intent to Terminate Your Installment Agreement within a month of ceasing payments. But this doesn’t mean the government can immediately garnish your wages –if you’re in default, you have a protected period of 60 days to file an appeal.
If you choose to file an appeal, the IRS cannot take any action against you while the appeal is pending. This gives you some more time to negotiate and find a payment arrangement that works for you.
The IRS is usually accommodating with a changed financial situation. If you need temporary or more permanent relief in your IRS payment plan, you may be able to get a reduced payment, render your payment uncollectible, or work an offer in compromise. The key is communication.
Are you struggling to meet the obligations of your IRS payment plan? Our qualified tax resolution strategists can help you understand your options and handle the situation the right way. Call us at 720-398-6088!