What is an Installment Payment Plan?
IRS Installment Agreement Plan Income Tax Relief Help Orlando, FL
An installment agreement plan Orlando is an agreement with the IRS to pay your federal tax bill over a certain amount of time. The Failure to Pay Penalty applies if you don’t pay the tax you report on your tax return by the due date or approved extended due date. The penalty you must pay is a percentage of the taxes you didn’t pay.
If you don't qualify for the IRS Offer In Compromise program, an Installment Agreement Plan may be the way to resolve your problem. Setting up a payment plan with the IRS gives you a little more time to pay off your tax debts.
You must be current in filing your tax returns in order to qualify. There are two kinds of IRS payment plans: short-term and long-term. Typically you’ll make monthly payments to settle what you owe. As long as you’re keeping up with the payments timely, the IRS usually won’t garnish your wages or seize any bank accounts or property.
Keep in mind that an IRS payment plan doesn’t get you out of interest and penalties for late payments; those amounts will continue to accrue until your balance is zero.
How Are Penalties Calculated?
The IRS calculates the Failure to Pay Penalty based on how long your overdue taxes remain unpaid. Unpaid tax is the total tax required to be shown on your return minus amounts paid through withholding, estimated tax payments and allowed refundable credits.
The Failure to Pay penalty will not exceed 25% of your unpaid taxes.
IRS calculates the Failure to Pay penalty based on if you:
- Fail to pay amount shown as tax on your return
- Fail to pay the tax you didn’t report on your return