If an individual is unable to make payments to either the Internal Revenue Service (IRS) or the Arizona Department of revenue, then a request for installment payments may be filed.
For the IRS, monthly payments can be agreed upon for an installment plan. Before filing an application for this payment plan, all tax returns must be filed.
Online payment agreements can be set-up if an individual owes $50,000 or less in income taxes, penalties, and interest or if a business owes $25,000 or less in income taxes, penalties, and interest.
If an individual or business in not capable of using only payment agreements, then the Form 9465, Installment Agreement Request and Form 433-F, Collection Information Statement can be mailed to the IRS.
When agreeing to installment payments, an individual is agreeing to paying at least the minimum monthly payment when due, future refunds applied to tax debt until paid in full, filing all required tax returns on-time, and making all scheduled payments even if IRS will refund account balance. In addition, name, address, SSN, daytime phone number, tax year and return type must be on payments and ensuring that statement has correct address (if not, then Form 8822, Change of Address needs to be filed).
Payments not met will receive a reinstatement fee which accrues penalties and interest.
For the Arizona Department of Revenues, Form 140IA Individual Income Tax Installment Agreement Request must be filed by the individual seeking installment payments.
In addition, that individual must meet the following requirements: cannot incur any new liabilities, payments must remain current, payment plans are subject to review, and there cannot be more than two previous defaulted payment plans.
The Arizona Department of Revenues allows up to two years for payments to be paid. But if an individual is unable to pay the amount, the amount of taxes owed can be lowered once financial information has been reviewed and necessary documents filed.
The help of a tax attorney to determine the installment payments necessary and to collect documents needed for file is crucial. Otto Shill at Jackson White has over 25 years as working as a tax attorney and can assist individuals in setting up installment plans.
Call JacksonWhite at (480) 464-1111 to discuss your case today.
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