IRS Installment Plan

[S T]

If taxpayer has an installment Plan for taxes owed in 2009, but will owe taxes for 2010 which taxpayer will pay in full 2010 taxes by 4/15/11, will taxpayer be allowed to continue the 2009 installment payments?

Or will IRS look for the 2009 taxes on installment to be paid as well?

Sandy

[Lion]

Installment

If he's current with the installment plan, it remains as agreed upon. One of the provisos is that he stays current with future (after the year of the installment) taxes. So, yes, he should pay his 2010 taxes in a timely manner and continue making his 2009 payments as agreed.

[S T]

Thank you

Thanks Lion,

That is the info I needed!

Sandy

[JohnH]

I've even seen situations in which someone currently on an installments agreement owed for a subsequent year and they filed an extension. The extension showed a balance due but they only paid part of the balance due. They then filed the return within 6 months, paying the balance due on the return. In a month or so, they received a bill for interest & a small FTP penalty, which they promptly paid. As long as they continued to make timely payments on the installment agreement during this entire process it was never considered to be in default.

[taxea]

Make sure that the 2010 payment specifically states that the payment is for 2010 or they may take it to pay 2009 first. Which they may do anyway.