Wednesday, July 1, 2009

Do You Qualify For AConditional Installment Agreement?

When you have tax liability and you are unsure about negotiating with the IRS yourself, contact a tax professional that can assist you getting this tax debt behind you. What the average taxpayer is uncertain about when negotating with the IRS themselves are the types of installment agreements in which you may qualify for. There are several types of resolutions that could be applicable to you, but being uneducated about those resolutions would prevent you from getting into a resolution that might be less of a financial burden each month.
One resolution that comes to mind is a conditional installment agreement. This past week I had a client get approved for a conditional IA. Conditional Installment Agreement's are however to get approved by the IRS. The perfect candidate for a conditional IA would be a taxpayer that after factoring in all their income and expenses, still has a large monthly disposable income. Say for instance, a montly disposable income of $2000/month would cause a hardship on most people. However, with a conditional installment agreement, the IRS will consider the actuals (actual expenses, not the IRS standards), if it will payoff the liability in full in 60 months.

How you calculate the monthly payment on a conditional installment agreement:
Take your Net Income minus the difference in the actual expenses and the IRS standards, minus the Total Allowable Expenses = the monthly payment

This payment times 60 months ( or five years) will give you the total payoff to the IRS. This should more than cover the total liability owing.

Conditional Installment Agreements normally consist of taxpayers that generate a substantial amount of income on a monthly basis, but in turn require some changes in lifestyle. Having a conditional installment agreement approved prevents taxpayers from possibly losing their homes and vehicles if they can live up to the payment arrangement till the liability is paid in full.

This is just one type of resolution that a professional tax resolution firm can assist a taxpayer in getting their tax debt behind them. If you have federal or state tax debt, don't hesitate to contact a reputable tax firm for help today.

4 comments:

footbolito17 said...

very informative post... even i had a hard time dealing with my IRS debts...

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Liza Gen said...

Hi Guys,

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paul david said...

Great article. Thanks for the info, this is really a helpful post. BTW, if anyone needs to fill out a Installment Agreement form, I found a blank form in this site PDFfiller. This site also has several related tax forms that you might find useful.