IRS Installment Agreements — Pennsylvania Tax Attorney
Paying IRS Tax Debt Over Time
If you cannot pay your federal tax liability in full, an installment agreement with the Internal Revenue Service (IRS) allows you to pay what you owe in monthly payments instead of a lump sum. Installment agreements are available to individuals and businesses, and for many Pennsylvania taxpayers they are the most practical way to resolve a tax debt — particularly when the debt is not in dispute and an Offer in Compromise is not a realistic option.
Two Things to Understand Up Front
First, interest and a reduced late-payment penalty continue to accrue on the unpaid balance while an agreement is in place, so the structure of the plan affects the total amount you ultimately pay. Second, entering into an agreement generally protects you from levies and other enforced collection while the agreement is pending and in effect — which for many taxpayers is the most immediate benefit.
The Main Types of IRS Installment Agreements
Guaranteed Installment Agreements
Generally available as a matter of right to individuals who owe $10,000 or less in tax (excluding penalties and interest), have filed and paid on time for the past five years, and can pay the balance within three years. Extensive financial disclosure is not required.
Streamlined Installment Agreements
Generally available for balances of $50,000 or less that can be paid within 72 months (or before the collection statute expires, if sooner). These involve a simplified approval process with little or no financial documentation, and the IRS typically does not file a tax lien.
Non-Streamlined (Regular) Installment Agreements
For larger balances or longer terms, the IRS requires full financial disclosure — assets, liabilities, income, and expenses — so it can evaluate your ability to pay. The monthly amount is negotiated based on that financial picture.
Partial Payment Installment Agreements
For taxpayers who cannot pay the full debt before the collection statute of limitations expires, a partial payment agreement resolves the debt for less than the full amount over the remaining collection period. It requires full financial disclosure, and the IRS revisits your finances periodically, which can change the payment amount.
Choosing among these is not always obvious. A plan the IRS readily approves is not automatically the plan that serves you best — for example, the IRS’s proposed monthly amount may be higher than your budget can sustain, or a different resolution option may cost less overall.
What Happens If the IRS Rejects Your Proposal
If the IRS rejects a proposed installment agreement, it sends a rejection notice explaining why. Common reasons include incomplete or inaccurate financial information, unmet eligibility criteria, or an IRS determination that you can pay in full. You have the right to appeal a rejection, generally within 30 days, and the IRS is generally barred from levying while a timely appeal is pending. A tax attorney can review the stated reasons, correct the underlying problems, and present the appeal.
How a PA Tax Lawyer Can Help
Every case is different, and no lawyer can promise a particular result. What a Pennsylvania tax attorney can do is assess which type of agreement your situation supports; prepare complete and accurate financial disclosures, since errors and omissions are among the most common reasons proposals fail; propose a monthly payment that reflects what you can actually sustain rather than simply what the IRS asks for; compare an installment agreement honestly against alternatives such as an Offer in Compromise or currently-not-collectible status; communicate with the IRS on your behalf; and handle an appeal if a proposal is rejected. This applies to individuals and businesses alike — from sole proprietors, who can find general guidance on managing business tax obligations through the U.S. Small Business Administration, to companies registered with the Pennsylvania Department of State.
Talk to a Pennsylvania Tax Attorney About a Payment Plan
If you owe federal taxes you cannot pay in full and want to understand your payment plan options, the attorneys at Premier Legal Solutions, LLC are available to discuss your situation. Call (267) 245-0649 or email info@1lawyer.com to schedule a consultation.
Attorney Advertising. This page is for general informational purposes only and does not constitute legal or tax advice. Reading this page or contacting the firm does not create an attorney-client relationship. Outcomes depend on the specific facts and circumstances of each matter, and prior results do not guarantee a similar outcome. Dollar thresholds and program terms reflect general IRS guidelines and are subject to change.