Owe IRS Taxes? Learn More About Partial Payment Installment Agreement

Owe IRS Taxes? Learn IRS Debt Resolutions

Tax Solutions When You Owe IRS Taxes
If you owe IRS taxes, you should research the internet for various IRS repayment plans. Often, results will lead you to numerous IRS resolutions such as Innocent Spouse, Penalty Abatement, and Offer in Compromise touted by tax debt relief companies as reasonable agreements to pay less than what you owe in IRS taxes.

The truth is the above resolutions are extremely hard to qualify for and only where extenuating circumstances apply. However, while Installment Agreements are the most popular IRS debt resolution for those who owe IRS taxes, the Partial Payment Installment Agreement is a kind of Installment Agreement that is quite common but not as well-known as OIC or Currently Not Collectible.

Partial Payment Installment Agreement

Taxpayers who owe IRS taxes will notice the similarities of a Partial Payment Installment Agreement (PPIA) to a standard Installment Agreement, in which a set monthly amount is paid until the Statute of Limitations runs out.

The difference between the two is where an Installment Agreement usually breaks your tax debt up evenly over five years; a PPIA will be a negotiated payment amount for the remainder of the Statute clock, which leaves most who owe IRS taxes paying less than their full tax debt.

PPIA Requirements

There are several requirements those who owe IRS taxes must meet in order to qualify for a PPIA including income, debt, property, and asset restrictions.

  1. IRS Forms 433A or 433B must be completed in order to calculate your ability to repay what you owe in IRS taxes. Only necessary expenses will be deducted from your income, such as mortgage or rent payments, transportation, basic utilities, food, and clothing.
  2. Tax Filing compliance is required. All tax returns have been properly filed, and any other years you owe IRS taxes have been paid upon the submission of your PPIA application.
  3. The IRS needs to determine that IRS collection actions would not be appropriate because it would either make it harder for you to pay the debt, or it would leave you without money for basic living necessities.
  4. The IRS may require you to make a "good faith attempt" at taking out a loan if you do not have any assets or equity in your home to pay what you owe in IRS taxes.
  5. If there are assets that can be liquidated to pay what you owe in IRS taxes, the IRS will need to determine the following in order to keep them from being seized.
    • The assets have minimal equity and therefore are not a viable solution for repayment.
    • You cannot sell the asset due to low demand or other market restrictions.
    • The asset helps generate income which would be used to pay what you owe in IRS taxes through the PPIA.
    • If the asset was sold it would create a financial burden and make it more difficult to pay what you owe in IRS taxes.

For business owners seeking a PPIA, there are additional requirements you must meet. In some cases, the IRS may ask you to sell assets to pay what you owe in IRS taxes. Refer to the Internal Revenue Manual for more details.

The IRS will stop at almost nothing to get what it is due when you owe IRS taxes. For taxpayers who are coming to the end of their Statute of Limitations, the IRS starts to become even more aggressive. A PPIA is a great tax debt resolution to combat the collection actions the IRS tends to impose while resolving what you owe in IRS taxes.

Call now or fill out the form below for a free consultation ifyou owe IRS taxes. We'll only connect you with a tax debt relief company holding at least a B rating with the Better Business Bureau.

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