If a taxpayer has an installment agreement with the IRS, the IRS expects monthly, on-time payments throughout the duration of the agreement until the debt is paid off. If any payments are made more than 30 days late, the taxpayer risks losing the installment agreement altogether and being liable for the entire tax debt balance in a lump sum within 30 days of default of the installment agreement.
In fact, the law states that if the installment payments are more than 30 days late, and no notice explaining the late payments is received by the IRS, enforceable collection actions are to be taken. This means a wage garnishment or levy of the taxpayer’s bank accounts are in order. Once an installment agreement is made and defaulted on, it’s very difficult to get the IRS to agree to another one.
That’s not to say the IRS is not reasonable or won’t negotiate. If there is communication about your delinquent tax payments, you can protect yourself from the law that forces aggressive collection actions.
You can call the IRS to explain your delinquent tax payments or you can send them a letter. If you choose to send them a letter, it is advised that you send the letter in a manner that will provide proof of delivery.
Sample Letter: IRS Delinquent Tax Payments
Date
IRS
Address
City, State, Zip
Re: Your Name
Social Security Number
Year Back Taxes Are Owed
To Whom It May Concern:
Despite an installment agreement made (insert date), I will be unable to make my payments (insert months that payments will not be made.)
Explain reason here (i.e. spouse passed away, you were disabled and unable to work, you were in a car accident and hospitalized, ect.)
Enclosed you will find documentation to support the issue that is preventing me from making my installment agreement payments.
I ask that (propose solution to your issue here or terms of a new installment agreement here.)
Should you have any questions, I’m happy to offer additional information. I can be reached at (enter the phone number you are most likely to answer here) (insert the best time to reach you here.)
Sincerely,
Your Name
Enclosure
Tips
**If your reason for being unable to make your installment payments are reasonable, meaning it’s easy to understand why you were unable to make the payments (such as hospitalization or a death in your family), the IRS will be more likely to work with you. If, however, you cite your reason for not making your installment agreement payments as “I had to go to Las Vegas for my brother’s bachelor party” then the chances of the IRS show sympathy for your position are much lower.
**Include any and all documentation to support the reason you claimed for being unable to make the payment(s). The more documented evidence the better.
**Try to get across to the IRS that you have a sincere regret for not being able to make the payments and had circumstances outside your control not interrupted your previously diligent payments, there would have been no missed payments.
**Make the IRS feel like this is a one-time incident and that you likely will not run into any more issues that will stop you from paying your installment payments.
**The bottom line here is to make the situation make sense to the IRS. They understand that sometimes things happen in life. They will be reasonable as long as they feel your efforts are sincere and notable.
Need Help?
IRS Tax Relief Now is happy to represent you in front of the IRS. We have savvy Enrolled Agents that know how to tell your story to your IRS agent in a way that will make them understand that you are doing everything you can to get your tax debt paid. We will negotiate on your behalf to be sure that you are able to continue with the same agreement or if the agreement must be changed, will work to get you the lowest possible payment for the shortest period of time which allows you to quickly put your tax debt behind you.
Contact us today. We have a perfect rating at the Better Business Bureau which attests to our level of customer service. In addition, we offer a free confidential consultation with no obligation to hire our firm. You have nothing to lose. Contact us today and sleep better tonight!