If you`re struggling to pay off your tax debt, the IRS offers an option to make payment more manageable through an installment agreement. However, many taxpayers are not aware that they may be eligible for a reduced user fee when setting up an IRS installment agreement.
The IRS charges a fee to set up an installment agreement, which can range from $31 to $225 depending on the type of arrangement and payment method. However, taxpayers who meet certain criteria may qualify for a reduced fee of $43 or even no fee at all.
To be eligible for the reduced fee, taxpayers must meet at least one of the following requirements:
– If you are a low-income taxpayer, you may qualify for a reduced fee of $43.
– If you agree to make automatic monthly payments to the IRS from your bank account, you may also qualify for a reduced fee of $43.
– If you are a qualifying member of the military, the reduced fee may be waived altogether.
To apply for a reduced fee, taxpayers should complete IRS Form 13844, Application for Reduced User Fee for Installment Agreements. The form requires the taxpayer to provide information about their income, expenses, and assets. If approved, the reduced fee will be added to the total amount owed and included in the monthly payments.
It`s important to note that interest and penalties will continue to accrue on the unpaid balance of tax debt while on an installment agreement. However, setting up a payment plan can help prevent more severe collection actions such as wage garnishment or bank account levies.
In summary, if you are struggling to pay off your tax debt, setting up an installment agreement with the IRS may be a helpful solution. Be sure to check if you qualify for a reduced user fee to make the payment process more manageable. Contact a tax professional or the IRS for more information on eligibility and how to apply for a reduced fee.