There are a variety of tax resolutions services that each have their own advantages and disadvantages, as well as requirements. In our first blog post in the series, Tax Resolution Services – What are they?, we discuss some of the more common tax resolutions solutions like Offer in Compromise, Currently Non-Collectible, Penalty Abatement, Installment Agreements and the Partial Pay Installment Agreement. Each one of these applies to different circumstances, that’s why we’re discussing each one individually, so you can figure out which is best for you or your business. To learn more about the different types of tax resolution solutions, see our first blog post in the series.
In the our previous blog posts, Tax Resolution Services: Offer in Compromise Requirements and Tax Resolution Services: Offer in Compromise, we went into further detail about Offer in Compromise and its advantages, mainly its ability as a tax resolution solution to potentially lower the amount of total debt an individual or business owes to the IRS. As we discussed in Tax Resolution Services: Offer in Compromise Requirements, one of the primary requirements for Offer in Compromise is that the taxpayer would experience financial hardship – by the IRS’s standards – by paying the full amount of debt owed to the IRS. If that is deemed to be true, and the individual or business meets several other requirements like not having filed for bankruptcy and having all required returns filed properly, they can then apply for the Offer in Compromise tax relief solution.
In this blog post, we’ll discuss the Partial Payment Installment Agreement. Like Offer in Compromise, the Partial Payment Installment Agreement also potentially allows taxpayers to pay the IRS less than the total amount owed. In addition to this, rather than as one lump sum payment with Offer in Compromise, the Partial Payment Installment Agreement tax resolution service allows taxpayers to repay the amount owed in installments over a period of time.
Partial Payment Installment Agreement Definition
According to the IRS, as of Nov. 21, 2020, “All taxpayers are expected to immediately full[y] pay delinquent tax liabilities. When this is not possible, taxpayers may be allowed to pay their liabilities over a prescribed period of time. If full payment cannot be achieved by the Collection Statute Expiration Date (CSED), and taxpayers have some ability to pay, the Service can enter into Partial Payment Installment Agreements (PPIAs).”
The IRS page, Partial Payment Installment Agreements and the Collection Statute Expiration Date (CSED), then continues to list some of the stipulations of the PPIA, saying that “before a PPIA may be granted, equity in assets must be addressed and, if appropriate, be used to make payment. In some cases, taxpayers will be required to use equity in assets to pay liabilities. However, as discussed below, complete utilization of equity is not always required as a condition of a PPIA.”
What this means is that before granting a PPIA, the IRS will thoroughly assess the taxpayer’s financial situation and may require them to use their assets to pay for some of the amount owed if the IRS deems it appropriate.
This is why it’s so important to navigate and negotiate with the IRS with the support of a team of tax resolutions specialists like the ones here, at Bullseye Tax Relief. It’s important to be prepared when negotiating with the IRS, and nothing can replace decades of training and experience. If you’re considering applying for a Partial Payment Installment Agreement to potentially lower your total amount owed to the IRS, give us a call today at (844) 582-3323, or send us an email at firstname.lastname@example.org.
Offer in Compromise vs. Partial Payment Installment Agreement
You’ll also want to keep an eye out for our next blog post. We’ll be discussing the differences between Offer in Compromise and the Partial Payment Installment Agreement. While the two may look somewhat similar in their potential ability to lower the amount owed to the IRS, they both have entirely different disadvantages and requirements that may help you understand which of these tax relief services is best for you.