When a taxpayer fails to meet his or her federal tax obligations to the Internal Revenue Service (IRS), he or she has a number of options available to meet that obligation and avoid an IRS levy. One such option is to request that the IRS and the taxpayer enter into an agreement whereby the taxpayer will pay his or her liability on a monthly basis over a set period of time. This is also known as an installment agreement, and such agreements can be obtained through filing Form 9465-FS with the IRS.

If the tax liability in question is greater than $25,000 but less than or equal to $50,000, and the taxpayer is unable to meet his or her tax obligation, Form 9465-FS is the appropriate form to file when requesting to enter into an installment agreement. That said, the form can be used by all taxpayers to request an installment agreement if they so choose. While installment agreements are typically limited to 72 months in duration, under certain circumstances the IRS may grant special dispensations to those that need to spread out the payments over a longer period. The IRS may also grant dispensations comparable to offers in compromise, where the full amount owed to the IRS is reduced as part of the payment plan. That said, be mindful that this does not necessarily mean that the amount originally owed is expunged, and such matters should be addressed with an experienced tax attorney.

Taxpayers should bear in mind that there are a number of financial remedies available depending upon the taxpayer’s particular circumstances. Offers in compromise may be available, as well as non-governmental remedies; for example, merely taking out a loan or putting the tax liability on a credit card may be a better option depending upon the terms of the installment agreement offered by the IRS. Form 9465-FS can be found at https://www.irs.gov/pub/irs-pdf/f9465.pdf. To file Form 9465-FS, the taxpayer must do so on paper and attach it to the tax return being submitted to the IRS, or alternatively mail the form on its own to the address shown in the Form 9465-FS instructions. See Internal Revenue Service, Instructions for Form 9465-FS, available at https://www.irs.gov/forms-pubs/about-form-9465.

Above all, bear in mind that decisions as to whether to enter into an installment agreement should involve serious consideration in consultation with an experienced tax professional. Such professionals are available in a number of forums, including a tax attorney, the Taxpayer Advocate Service, and other third-party professionals.

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Please keep in mind the information and advice presented in this blog is not intended to be used as formal legal advice. Contact a tax professional for personalized tax advice pertaining to your specific situation. While we try and answer all parts of the question when we write our blogs, sometimes there may be some left unanswered. If you have any questions about your problems with the IRS, SBOE, FTB, or BOE, or tax law in general, call RJS Law at (619) 595-1655.