The IRS announcing the suspension of installment agreements is a significant development that impacts taxpayers who have existing payment plans with the agency. If you are one of the millions facing financial difficulties during these challenging times, this news can be a cause for concern.
An installment agreement is a payment plan that taxpayers can set up with the IRS to pay their tax debt over time. It is an option for those who cannot afford to pay their tax liability in full and require more time to make payments. However, if you have an existing installment agreement with the IRS, it`s essential to understand how the IRS suspending installment agreements can impact you.
The IRS announced on March 25, 2020, that it would allow taxpayers who already have installment agreements in place to suspend their payments for up to three months. The change is in response to the COVID-19 pandemic and the government`s efforts to provide relief to those who are struggling financially.
If you have an existing installment agreement, you can request a suspension of your payments by contacting the IRS. However, keep in mind that interest and penalties will continue to accrue during the suspension period. Once the suspension period is over, you will need to resume your payments according to the terms of your agreement.
It`s important to note that the IRS will not default or terminate installment agreements during the suspension period. If you fail to make payments during this time, the IRS will not take any enforcement action, such as issuing a levy or seizing your assets. However, your tax debt will continue to accrue interest and penalties until you resume payments.
If you are currently unable to make payments due to financial hardship, you may be eligible for an Offer in Compromise. This option allows taxpayers to settle their tax debt for less than the full amount owed. However, it`s crucial to work with a qualified tax professional to determine your eligibility for this program and make sure you understand the process and requirements.
In conclusion, the IRS suspending installment agreements is a crucial development for those who have existing payment plans with the agency. The suspension period can provide temporary relief for taxpayers facing financial difficulties, but it`s essential to understand the long-term implications of this change. If you need help managing your tax debt or exploring your options, reach out to a tax professional who can guide you through the process.