Qualifying for a Guaranteed Installment Agreement from the IRS

Sometimes, people get hit with tax bills that they cannot pay all at once. If that ever happens to you, don’t panic. Instead, reach out to the IRS and ask about an installment agreement, which will give you more time to pay your taxes.   

Of course, with an installment agreement, you will have to pay penalties and interest, which means that your tax bill will ultimately be higher. So, don’t use this resource unless you absolutely have to.

If you do ultimately need a payment arrangement, however, make sure you choose the right type for your needs, as well as a type for which you are eligible.

One common type of installment agreement is the guaranteed installment agreement, though not everyone will be eligible for this option.

Eligibility Requirements

The guaranteed installment agreement is a great option for taxpayers. Under this arrangement, they will not have to worry about a federal lien being filed against them.

In order to qualify for this agreement, you have to owe less than $10,000, excluding interest and penalties.

You also must not have had an IRS installment agreement of any kind in the last five years, and you must have filed and paid your taxes on time in all of those years.

If you meet these basic requirements, can pay at least the minimum monthly payment required, and can pay your debt within the next three years, you should have no problem getting a guaranteed installment agreement.

The Value of Professional Advice

If you’re fortunate enough to qualify for a guaranteed installment agreement or some other type of arrangement, work hard to avoid finding yourself in this situation in the future.

Talk to a professional tax advisor about ways to possibly lower your taxes and what you can do to make paying your taxes on time easier and more possible.

Getting and staying on track with the IRS will ultimately make your life a whole lot easier.