For those of us who can’t resolve our California or federal tax debt immediately, an installment agreement can be a good payment option. You may be eligible for an installment agreement which allows for the full payment of the tax debt in smaller, more manageable monthly amounts. Your installment agreement, payment agreement, payment option or a payment plan are all the idea same since each one allows you to make payments over time on the tax you owe. That sounds like a good deal, but you can save money by paying the full amount you owe as quickly as possible to minimize the interest and penalties you’ll be charged.
You may be eligible for an installment agreement on past taxes but you must have filed all required tax returns and paid your estimated tax payments for current taxes if required.
How to Set Up an Installment Agreement
If you want to pay off a tax debt through an installment agreement, and owe:
$25,000 or less in combined tax, penalties, and interest can use the Online Payment Agreement (OPA) or call the number on the bill or notice (have the bill or notice available, along with the social security number). A fill-in Request for Installment Agreement, Form 9465, is available online that can be mailed to the address on the bill.
More than $25,000 in combined tax, penalties, and interest may still qualify for an installment agreement, but a Collection Information Statement, Form 433F may need to be completed. Call the number on the bill or mail the Request for Installment Agreement, Form 9465 and Form 433F to the address on the bill.
Eventually, you will receive a written notification telling you whether your terms for an installment agreement have been accepted or if they need to be modified.
To speak with a tax attorney, call Mitchell A. Port at (310) 559-5259.