tax tips for tax year 2008
Installment Agreements
For those who cannot satisfy all of their tax debt immediately, an installment agreement may be a reasonable option allowing you to gradually make payments on the tax you owe. Installment agreements authorize you to pay tax debt in smaller, more manageable amounts. To be eligible for an installment agreement, you must have filed tax returns and made estimated tax payments as required.
To set up an installment agreement when you owe:
• $25,000 or less in combined tax, penalties, and interest: use the Online Payment Agreement (OPA) at www.irs.gov, call the number on the bill or notice you received, or complete Form 9465 and mail it to the address indicated on the bill you received.
• More than $25,000 in combined tax, penalties, and interest: call the number on the bill or notice you received or complete Forms 9465 and 433F and mail them to the address indicated on the bill or notice you received.
You will receive written notification telling you whether your installment agreement request has been approved or whether it needs to be modified. Once approved, you will be subject to a $105 fee ($52 if payments will be made by electronic funds withdrawal or $43 if your income is below a certain level). A fee of $45 is also charged for reinstating a defaulted installment agreement or restructuring an existing installment agreement regardless of your income level. If you already have an approved installment agreement from a previous tax debt and your financial situation has changed, you may be able to modify or restructure your installment agreement to include additional amounts owed into one agreement.