Once you enter into an installment agreement with the IRS, it is crucial that you remain in good standing with them. Installment agreements come with their own penalties, fees, and costs. When a taxpayer goes into default under the terms of such agreement, additional fines may accrue. Fortunately, there are actions that you can take to reduce the likelihood that you default under the agreement.
How to Keep Your Installment Plan in Good Standing
In order to ensure that your installment agreement remains in good standing, abide by the following guidelines:
- Always pay at least your minimum monthly payment when it is due.
- Consider opting for direct debit or payroll deductions in order to help ensure that you make your payments on time.
- Every time that you make a payment, be sure to include all necessary information. This includes your full name, address, social security number, daytime phone number, the tax year, and tax return type.
- Always file your tax returns on time.
- Always pay all of your taxes in full and on time.
- If you cannot pay your tax obligations, contact the IRS right away to modify your existing installment agreement.
- Even when the IRS applies a tax refund to your outstanding installment plan balance, continue making regular payments as scheduled.
- If you move, ensure that your statement is sent to the correct address.
- To change the address on file with the IRS, file Form 8822.
Avoid paying additional penalties and interest by ensuring that you remain in good standing with the IRS. Was this information helpful? If so, we encourage you to find us on Twitter.