IRS is simplifying the process of getting a repayment agreement

| Nov 16, 2020 | Federal And State Tax Collections

Especially this year, many taxpayers are facing challenges paying their tax bills. If the pandemic has affected your ability to pay, the IRS has your back, according to a recent announcement. At least, the agency is making it easier to settle up.

Taxpayers have always had options for repayment, such as:

  • Short-term repayment plans
  • Long-term repayment plans
  • Installment agreements
  • Offers in compromise

The pandemic, however, has made it difficult for some people to meet their obligations under these plans. There is now a new IRS Taxpayer Relief Initiative that has expanded on these options or reduced the burden of them. Here are some highlights:

  • If you qualify for a short-term repayment plan, you may now take 180 days instead of 120 days to pay your tax debt.
  • If you have an accepted offer in compromise but are temporarily unable to meet the payment terms, the IRS is offering additional flexibility to the terms.
  • If you have an existing installment agreement, the IRS will automatically add any new tax debts to that agreement instead of defaulting the agreement.
  • If you are an individual taxpayer who owes less than $250,000, you may be allowed to set up an installment agreement without the financial substantiation that your proposal is sufficient.
  • If you are an individual taxpayer who owes only for the 2019 tax year and owes less than $250,000, you may qualify to set up an installment agreement without waiting for the IRS to notify you of a federal tax lien.
  • If you have an existing Direct Debit Installment Agreement, you may now be allowed to use the Online Payment Agreement system to propose a lower monthly payment and/or change your due dates.
  • Certain taxpayers may be allowed to extend their short-term repayment plans from 120 to 180 days.

In addition to the options above, the IRS also may allow:

  • A temporary delay in collections
  • Relief from penalties with reasonable cause
  • First-time penalty abatement relief

If you owe a tax debt, you can apply for assistance directly at However, if you owe a substantial amount, you may want to talk to a tax attorney to argue for the most favorable treatment.

Don’t be silent about a tax debt you can’t pay. The IRS does have options available that could help you.

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