How Long Can Irs Installment Agreement Last
Are you struggling with tax debts and considering an installment agreement with the Internal Revenue Service (IRS)? An installment agreement is a payment plan that allows taxpayers to settle their tax debts over time. However, you may be wondering how long an IRS installment agreement can last.
The length of time for an installment agreement can vary depending on several factors. Generally, the IRS allows taxpayers to pay their tax debts over a period of 72 months or six years. However, there are scenarios where the agreement can last longer or shorter.
If you owe over $50,000 to the IRS, you are required to file a Collection Information Statement (CIS) to determine your ability to pay. The amount of your monthly payments and the duration of the agreement will be based on your financial situation. The IRS will take into account your income, expenses, assets, and liabilities to determine your monthly payment amount.
In some cases, the IRS may accept a longer installment agreement beyond 72 months if the taxpayer qualifies for a Partial Pay Installment Agreement (PPIA). A PPIA is a type of installment agreement that allows taxpayers to pay less than the total amount owed over an extended period. The duration of a PPIA can be up to 84 months or seven years.
It`s important to note that the longer the installment agreement, the more interest and penalties you will accrue. It`s crucial to try to pay off the debt as quickly as possible to minimize the additional fees and interest charged by the IRS.
If your financial situation improves, you may also consider paying off the debt sooner by increasing your monthly payments or making lump-sum payments. This can help reduce the overall length of the agreement and save you money on interest and penalties.
In some cases, the IRS may also terminate or modify an installment agreement. If you fail to make timely payments or provide updated financial information, the IRS may default your agreement. Keep in mind that once your agreement is in default, you will need to renegotiate a new payment plan with the IRS.
In conclusion, an IRS installment agreement can last up to 72 months or six years. However, if you qualify for a Partial Pay Installment Agreement, the duration can be up to 84 months or seven years. It`s essential to try to pay off the debt as soon as possible to avoid additional fees and interest charges. Always communicate with the IRS and keep them updated on any changes in your financial situation to avoid defaulting on your agreement.
