What Happens If You Miss an IRS Installment Payment?
Dealing with tax liability can be difficult, especially if you owe a sum of money that is more than you can afford. Fortunately, the IRS has a program where they allow you to make payments on your tax bill over time. They refer to these payments as an installment agreement.
You can set up your agreement with the IRS online or over the phone, and you have the opportunity to set up payments that you can afford. So long as you make your payments on time, you should be able to pay off your tax bill, and the IRS will consider you in good standing while you are following the terms of your installment agreement.
But, what happens if you miss an IRS installment payment?
Missed a Payment? What Could Happen to You?
Your installment agreement depends on you keeping up with your monthly payments as you agreed to do when you made the agreement. The IRS mostly understands if you pay late on the rare occasion, but they do reserve the right to terminate your agreement at any time that you break it.
They won’t likely terminate your agreement if you’re one day late making your payment on one occasion, but if you are habitually late or are skipping payments, they will likely terminate the agreement.
Additionally, the IRS may also terminate your agreement if you incur a new tax liability, but sometimes, the agency lets you pay both tax debts with the same installment agreement.
What if you can no longer afford to make the agreed-upon monthly payment?
Financial circumstances can change, so you should contact the IRS right away. They may ask you to provide them with evidence of a change in your financial situation. They may be able to lower your monthly installment payments, or you could try to come up with an alternative arrangement, such as filing for currently not collectible status.
Reach Out to a Tax Attorney for Help
Now you know a little more regarding what happens if you miss an IRS installment payment. For help communicating with the IRS, contact The W Tax Group. Our nationwide headquarters can be reached via the form below or by calling 877-500-4930.