Experienced, Reputable Denver Lawyers

Experienced, Reputable Denver Lawyers

Attorneys at Beem & Isley P.C.

Can you use a monthly payment plan for tax debt?

On Behalf of | Sep 9, 2020 | Tax Law

Having any kind of debt can weigh heavily on a person. If Colorado residents have tax debt, they may feel even more burdened and worried that the government will take action against them. Unpaid taxes can result in penalties, fees and interest, but qualifying individuals may have options for paying off their outstanding balances.

One possible option is to apply for a monthly payment plan with the IRS. Form 9465 allows taxpayers who cannot pay their outstanding taxes to request a payment plan. However, certain stipulations must be met. If individuals do not owe more than $10,000, the IRS will approve their application as long as all past tax returns have been filed, another installment agreement has not been approved in the last five years and the balance can be paid off in three years. If a person owes more than $50,000 in unpaid taxes, the taxpayer will need to file a paper application rather than applying online.

The amount a taxpayer pays each month will depend on how the person chooses to pay. The amount can range from $31 per month if an online payment agreement and direct debit agreement are set up to $225 per month if there is no online payment agreement and no direct debit agreement. The IRS may waive certain fees, like the online setup fee, for low income individuals.

Of course, not everyone qualifies to set up a monthly repayment plan for their tax debt. However, that does not mean they are completely out of luck. Colorado residents facing this type of predicament may want to contact experienced tax law attorneys who could go over their specific details to determine what tax relief options, include setting up a monthly payment plan, they may have.