Taxpayers with unpaid tax debts can always pay the IRS. The IRS will almost always accept payments–even if they do not fully satisfy the unpaid tax liability.
Most taxpayers will benefit from entering into a monthly installment agreement with the IRS rather than simply remitting payments to the IRS periodically. The primary benefit is that the IRS will not pursue collections actions when the taxpayer is complying with an agreed upon monthly installment agreement. This allows the taxpayer to live their life without worrying about the IRS levying on their bank account, garnishing their wages, or taking their property.
This collections benefit is particularly useful given that the monthly installment agreement does not necessarily have to be in an amount that would fully pay the tax debt and the IRS typically only has ten years to collect the debt. Thus, the monthly installment agreement can be a way to keep the IRS at bay until the tax liability goes away on its own.
There are a number of rules that apply, but the IRS generally does not consider the amount of the tax debt in entering into monthly installment agreements. The IRS evaluates the “reasonable collection potential.” These rules are complex.
We can help with this. We advise taxpayers on and help taxpayers obtain installment agreements. Please contact us immediately if you owe the IRS an unpaid tax debt and are considering an installment agreement.