Slashed Tax Bills IRS Payment Plan Secrets Revealed
The IRS provides a few different options for payment plans, each tailored to different needs:
1. **Short-Term Payment Plan**: This option is ideal for those who can pay their tax debt within 120 days. There are no setup fees for this plan, making it an attractive choice for those who need a little extra time but can manage the full amount relatively quickly1.
2. **Long-Term Payment Plan (Installment Agreement)**: For those who need more than 120 days to pay off their tax debt, the IRS offers installment agreements. These plans can be set up for monthly payments, with fees varying based on how payments are made. For instance, setting up direct debit payments can reduce setup fees2.
3. **Offer in Compromise**: This is a more specialized option where taxpayers can settle their tax debt for less than the full amount owed. The IRS considers your ability to pay, income, expenses, and asset equity to determine eligibility3.