Who ya gonna call?

[JohnH]

That's an interesting twist I had not run across. I can't find anything in the on-line installment agreement info that says the fee is reduced or that the interest rate is less.( I thought the interest rate was set by statute). Can you point us to where that info is located?

The fee is reduced if the taxpayer chooses to pay by bank draft or if they meet certain income limits, but that applies to paper, verbal, or on-line installment agreements.

[outwest]

though quoted as a percentage..

it's the failure to pay penalty is reduced from .5% to .25% per month during the term of an installment agreement.

Not the interest rate.

[ChEAr$]

uh.. welll

Great suggestion, Harlan.

I have always just given them the printed Installment Agreement Request or suggested thay they call IRS themselves, since it's fairly routine if they meet the qualifications. I looked at the online process after seeing your post, and it does look very straightforward.

I forgot to mention one thing, John. Helping him out with the IA online calls for using your time.
time is money.
and you know what I mean.

KA ching!

[BP.]

Also, the interest rate while a taxpayer is on installment is less than if they are not,

Did not know that. Thanks for the info. Do you know the % rate difference?
Uh, nevermind, just saw outwest's clarification. Thanks!

[JohnH]

I had an interesting little twist on this payment arrangement matter yesterday. Client owes about $13K on a multi-year balance which began as about $25K and has been paying it off at a rate of $480 per month. The client's spouse died about 18 months ago and we called to attempt to get the payment reduced at that time. (Although it's a bit of a stretch, client's income is sufficient to support the payment and an OIC isn't possible).

After several efforts at getting the payment reduced over the past year and a half, we were at a standstill because IRS kept telling us the ONLY way to get a payment reduction was to default on the installment agreement and then negotiate a new one. Defaulting was not an option due to the fact that the client is in a sensitive work situation and a little slip-up here could cost the client their job.

After thinking over the prevous thread and recalling some recent publicity by IRS, I called the client to tell them about the new friendlier IRS collections attitude, so we called them yesterday and within a few minutes we had a new payment set up of $220/month. This will cost them $43 to reset the payment arrangement, but client is happy as can be. It will take them longer to pay it off and cost additional interest & penalties, but since they aren't able to borrow the money from a 3rd party at the moment, they are glad to just have some relief.

I tell this story just to point out that it appears there may indeed be some softening of the guidelines IRS is using with respect to payment arrangements. Just an FYI in case this may apply in some way to a client you have or may have in the near future..