A taxpayer has many options when resolving a balance due with the Internal Revenue Service. The most common of these is to register for a special installment payment agreement with the IRS. This means that the taxpayer signs an agreement with the IRS, allowing them to make monthly payments for a designated period of time. The amount that the taxpayer has to pay on a monthly basis is calculated by the IRS.
Once the plan is set up and as long as the installment agreement remains in effect, the IRS cannot make any collection activities, such as bank levies or wage garnishments. To initiate the agreement, taxpayers must first file IRS Form 9465-FS, which is also known as an Installment Agreement Request.
What is an Installment Agreement Request?
Taxpayers who can’t pay the whole amount shown on their tax returns to the IRS have the alternative to request a monthly installment plan. This is exactly what IRS Form 9465-FS is designed for. However, this form is designed only for certain taxpayers. You can use this form only if you are an individual taxpayer with a balance due between $25,000 and $50,000.
How to file an installment agreement request
The form is divided into two parts. First, you must indicate whether you want to file it for your 1040 or 941 tax form and for what tax year you are filing for. Part 1 of the Installment Agreement Request is called General Information. Besides providing the usual information, such as your full name, SSN, FEIN, etc., you will also need to indicate the total amount you owe to the IRS. This part of the request must then be dated and signed.
The second part of the installment agreement request is titled Additional Information. Here you must provide details about your marital status, household expenses, net income per paid period, vehicles you own, health insurance etc. Make sure you fill in all required fields correctly to avoid having your form rejected.
The fees for submitting an installment agreement request
When filing a request, you have to pay certain fees. The amount of these fees depends on how you set up your agreement. If you’re going to sign your agreement online and make payments by debit card, you’ll have to pay a $31 fee. If you decide not to sign an online agreement, but still want to make your payments by debit card, the fee is $107. If you sign an online agreement, but do not plan on paying by debit card, the fee is $149. And if you don’t sign an online agreement and don’t plan on paying by debit card, the fee will be $225.
Where to send the installment agreement request
Make sure that you attach the completed installment payment agreement to your IRS Form 1040 or 941. Your Form 9465-FS along with a return, is sent directly to the IRS. The address you send it to depends directly on your state of residence. Check for addresses here.
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