Tax Law | Installment Agreement



Tax debt can be frightening if you are unfamiliar with the applicable law, but if left unaddressed you could find yourself with a bank levy or wage garnishment. If you have a looming tax debt and cannot pay the debt in full, our office can negotiate and setup the right installment agreement for you to help your debt become more manageable. An installment agreement is a monthly payment plan with the IRS and/or California Franchise Tax Board (FTB) to help you pay back your tax debt. 

If your IRS tax liability is under $50,000 and you can pay your debt off in 72 months, then you qualify for the streamlined installment agreement. However if your tax debt exceeds $50,000 or you need greater than 72 months to pay off the debt, you would need to apply for the non-streamlined installment agreement. The IRS requires an extensive financial statement to be provided so that they can determine how much you can pay per month. The terms of the installment agreement are negotiated directly with the IRS agent.

If your FTB tax liability is under $25,000 and you can pay off your debt in 36 months, then you qualify for an installment agreement. However if you need greater than 36 months to pay off the debt, the FTB will require an extensive financial statement be provided so that they can determine how much you can pay per month. The terms of the installment agreement are negotiated directly with an FTB agent. 

If your installment agreement request is rejected, the IRS and/or FTB may speed up the collections process against you since they now have a full disclosure of your financial information. Furthermore, interest continues to accrue during the installment agreement process and a delayed or rejected installment agreement only increases the amount of money owed to the IRS.

A manageable installment agreement is by no means offered in every tax case. It is a profit that must be negotiated for by a skillful California tax attorney.  The Law Offices of Lucy Zheng can help you navigate this complicated process and obtain the lowest payment per month with the IRS and/or FTB. Contact us today for your free initial consultation.