Missing IRS Installment Payments Due to Illness or Injury: What Are the Consequences?
IRS installment payments provide a valuable opportunity to address your debt little by little, but the consequences of not paying on time can be harsh. Your failure to keep up with your installment plan could lead to its termination, followed by additional penalties from the IRS.
Unfortunately, life sometimes gets in the way. If your IRS installments aren’t currently paid via direct deposit, you could be at risk of missing multiple payments due to issues beyond your control. Illness or injury, for example, may limit your ability to keep up with various bills such as IRS installments.
If you’re struggling, it’s important to address the situation as quickly as possible. Keep reading to learn which penalties are possible — and what you can do to avoid them.
Defaulting on Your Agreement
The chief risk of missed installments? Defaulting on your plan. While it’s sometimes possible to miss a month without going into default, it’s never worth the risk.
Should you default on your account, you may be required to pay the remainder of your tax bill in one fell swoop. If you’re unable to do so, collection action could be a possibility.
If you find that circumstances outside of your control (such as illness or injury) prevent you from making your installment payments on time, it’s best to be open and honest with the IRS.
Get in touch as soon as you realize that you’ve missed a payment. You may be able to secure a reduced monthly bill that reflects your new reality. Keep in mind that you might be required to submit evidence of the reasons underscoring your inability to pay.
Our team at the Highland Tax Group has handled a variety of complex cases involving IRS installment agreements. Whether you need help setting up a plan or urgent assistance after you’ve missed payments, you can count on us for guidance. Reach out today to learn more.