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IRS is Making it Easier for Installment Agreements

Due to Covid-19, the IRS has recently made changes to help ease the burden to taxpayers who owe money. The IRS is trying to give more options to people to make their payments. The IRS is expanding their payment plan options and added new tools to assist taxpayers:

• If you qualify for a short term payment plan you now have 180 days to resolve the tax liability instead of 120 days.

• The IRS is offering flexibility for taxpayers who are currently unable to meet their obligations with their Offer in Compromise.

• The IRS will automatically add certain new tax balances to existing Installment Agreements, for individual and out of business taxpayers. This taxpayer-friendly approach will occur instead of defaulting the agreement, which can complicate matters for those trying to pay their taxes.

• Certain qualified taxpayers who owe less than $250,000 may setup an installment agreement without providing proof, such as a financial statement, that their proposed monthly payments are sufficient enough.

• Some people who only owe a 2019 tax and its under $250,000 may qualify to setup an installment agreement without a notice of federal tax lien filed by the IRS.

• Qualified taxpayers with existing Direct Debit Installment Agreements may now be able to use the Online Payment Agreement system to propose lower monthly payment amounts and change their payment due dates.

Please consult your tax advisor on all the above issues.

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