Have a Tax Question? Ask a Tax Expert
Hi and welcome to our site!The first step would be - to prepare your tax returns - and determine your actual tax liability - it might be less than the IRS determined - in this case - you may simply file your tax returns - and your tax liability (and corresponding penalties and interest charges) could be reduced substantially.To prevent the IRS from garnishing your wages - generally - you need to establish payment plan. This agreement would allow you to pay your full debt in smaller, more manageable amounts. Installment agreements generally require equal monthly payments. The amount of your installment payments and the number you make will be based on the amount you owe and your ability to pay that amount within the time the IRS can legally collect payment from you. You will find more information and references to forms on this page - http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Fresh-Start-Installment-Agreements
In order your your installment agreement to be accepted - the maximum term should be not more than 72 months. Before you apply:
If you are not comfortable using online application - Complete and mail Form 9465, Installment Agreement Request
If you will not be able to reach any agreement with the IRS - your income and assets might be garnished to satisfy the tax debt. So - you better to avoid such situation.
The link you provided http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Fresh-Start-Installment-Agreements says:
Within the link you provided it says:
The Streamlined Installment Agreement criteria is divided into two categories, balance due of $25,000 or less, and balance due $25,001 to $50,000.
The criteria to qualify for streamlined installment agreements with a balance due of $25,000 or less are:
Noting the 2 things I highlighted - What is the Collection Statute Expiration Date? and How do I know if I'm compliant with all filing and payment requirements? Will you please answer these clarification questions? Thank you
the Collection Statute Expiration Date is ten years after the tax liability is assessed. So if you have the tax liability only from 2011 - and do not have any earlier tax liability - that should not be your concern. What you need in connection with this item - file your 2011 and 2012 tax return - so your tax liability is clearly identified.
Do you know if this applies to state tax returns also? I live in Minnesota.
In general - yes - but you need to apply for state installment agreement separately.
Thank you so very much, you've been a great help. God bless you!!!
Here is the publication which might be helpful - http://www.revenue.state.mn.us/collections/factsheets/Installment_Payment_Plans.pdf
You have the option of setting up a payment agreement online using the department’s payment agreement system.
Thank you for that link. It looks like it presupposes I have filed the return already, which I have not. So do I file my state return with no payment at this time? I'm confused, I'm sorry.
Yes - all tax returns must be filed before you start application for installment agreement.You need to know the exact amount of your tax liability - that you do not know if you have not file tax returns.
ok thank you.