I want to set up an installment plan for my tax debt, what are the fees associated with this plan?

When you are faced with mounting tax debt that you cannot afford to pay, an alternative solution that may be worth considering is to enter into an installment agreement with the IRS. If allowed by the IRS, you will be able to make monthly payments rather than paying your debt in one lump sum. While this may seem like a perfect solution, it is important to consult with a knowledgeable attorney in Oklahoma City before moving forward. There are fees, penalties, and interest that can accrue with the setting up of an installment agreement.

IRS Fees for Setting up an Installment Agreement

Unfortunately, the IRS does not allow taxpayers to enter into installment agreements at no additional cost. Generally, the fees associated with setting up the plan break down as follows:

  1. The fee for setting up an agreement where your funds are directly debited from your account is $52.
  2. The fee for setting up a standard installment agreement or a payroll deduction agreement is $120.
  3. The fee for the installment agreement, if you can show that your income falls below a certain level, is $43.

 

These fees may not seem overwhelmingly high on their own; however, it is important to remember that there may be other penalties and costs associated with the installment agreement. When fees, penalties, and costs are added together, it may become prohibitively expensive to enter into an installment agreement in some cases. To learn more about IRS related issues, we encourage you to view our free guide, The Ultimate Survival Guide for IRS Problems.

We hope that this article provided you with helpful information about the fees associated with setting up an installment agreement. If so, we encourage you to follow us on Twitter. We frequently tweet additional information and links about IRS problems, and solutions to those issues, for the benefit of Oklahoma City taxpayers.